Buckingham Bingo Ltd
| Jurisdiction | UK Non-devolved |
| Judgment Date | 08 May 2018 |
| Neutral Citation | [2018] UKFTT 257 (TC) |
| Date | 08 May 2018 |
| Court | First Tier Tribunal (Tax Chamber) |
[2018] UKFTT 0257 (TC)
Judge Aleksander
Geoffrey Tack, solicitor, of DLA Piper LLP, appeared for the appellant
Peter Mantle, counsel, instructed by the General Counsel and Solicitor to HM Revenue and Customs, appeared for the respondents
Value added tax – Application to strike-out – Jurisdiction – Whether letter from HMRC constitutes an appealable decision – Alternatively application to amend appeal so it is against earlier decision – Whether tribunal should allow a late appeal – Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (SI 2009/273), r. 2 and 8– VATA 1994, s. 83G(6).
The First-Tier Tribunal (FTT) found against the taxpayer and did not allow a fresh appeal against HMRC's decision to strike out the case.
This was an application by HMRC that the Appellant's (“BBL”) appeal be struck out on the grounds that the Tribunal had no jurisdiction in respect of these proceedings, or alternatively that the Tribunal should not exercise its discretion to allow BBL to amend its Notice of Appeal to allow them to make an appeal out of time.
An agreed bundle of documents was put before the FTT in evidence. BBL was a bingo operator. The fact pattern relating to the supplies in issue in this appeal was similar to the fact pattern considered by this Tribunal in Carlton Clubs plc [2011] TC 01389. The decision in Carlton Clubs was issued on 9 August 2011.
Between November 2011 and January 2012 there was correspondence between KPMG (who were BBL's representatives at the time) and HMRC notifying HMRC of BBL's intention to make an adjustment to its Value added tax (VAT) returns under reg. 38, VAT Regulations 1995. BBL issued an “internal credit note” in order to adjust the amount of consideration for bingo session income for the period from 1 January 1997 to 30 September 2004, which was recognised in the 12/11 VAT return. On 21 January 2012, BBL filed its 12/11 VAT return electronically, which included a claim for a refund of £1,616,384.44 output VAT that had been overpaid.
On 3 July 2012, HMRC issued a decision letter rejecting the claim. The decision letter set out BBL's rights of appeal.
On 5 January 2017, HMRC wrote to DLA Piper (who were BBL's representative at the time) stating that their letter of 3 July 2012 had ruled on the reg. 38 adjustment. HMRC also declined to undertake a late statutory review. The letter went on as follows: For the avoidance of doubt this correspondence does not itself contain a decision. It serves only to reaffirm that a decision was made on 3 July 2012.
HMRC's case was that its letter of 5 January 2017 did not contain an appealable decision, and therefore no appeal could be made against it. HMRC acknowledged that BBL had a right of appeal against its decision letter of 3 July 2012, but that the time limit for lodging any appeal had long expired
BBL submitted that as VAT was a self-assessed tax, HMRC had a duty to process VAT returns, and that its return of 12/11 remained unprocessed. BBL submitted that there were no applicable time limits that prevented HMRC from processing adjustments under reg. 38.
Further, BBL submitted that HMRC's letter of 5 January 2017 constituted an appealable decision, and that the Tribunal could entertain an appeal in respect of it.
The judge considered the concept of the unprocessed VAT return and the reg. 38 adjustment. The judge agreed with HMRC, and found that there is no merit in relation to BBL's submissions that their 12/11 VAT return had not been processed. There followed submissions in respect of the 5 January 2017 letter by both BBL and HMRC. The judge agreed with HMRC that their letter of 5 January 2017 did not include any appealable decision, and he so found. Just because BBL wanted HMRC to make a fresh decision, it did not follow that HMRC had made such a decision. He did not accept BBL's formulation that this appeal was against a decision of HMRC to refuse to process an extant adjusted VAT return.
The judge found that HMRC's letter of 5 January 2017 did not include any decision in respect of which an appeal lay to this Tribunal. He therefore struck out BBL's appeal under r. 8 of the Tribunal's procedure rules, as the Tribunal had no jurisdiction in relation to these proceedings. He refused to give leave to BBL to amend its Notice of Appeal.
The judge went on to consider whether there was unjust treatment.
It was not in dispute that the cases of Carlton Clubs and KE Entertainments (KE Entertainments Ltd [2016] TC 05257) were exactly on point with BBL's position. In consequence, submitted BBL, it has been treated unjustly. BBL referred to the Tribunal's procedure rules, and the overriding objective of the Tribunal to deal with cases fairly and justly.
BBL submitted that it was manifestly unfair and unjust for a taxpayer in the same position as Carlton Clubs and KE Entertainments to be dealt with differently, or to be denied a hearing. Accordingly, BBL's appeal should be entertained by the Tribunal in the interests of fairness and justice.
There was no evidence before the Judge that suggested that HMRC has not dealt with BBL in any way that is unfair or unjust. HMRC made a decision in relation to BBL's VAT claim in July 2012. BBL decided, having taken professional advice, not to appeal against that decision. They could not now complain, having decided not to appeal, that the consequences of their own decision were unfair or unjust. He then considered the application to allow an appeal and listed in para. 62 the principles from previous case law. He listed the key questions Morgan J in Data Select said that the Tribunal should ask itself, and made its decision in the light of the answers: what was the purpose of the time limit; how long was the delay; was there a good explanation for the delay; what would be the consequences for the parties of an extension of time; and what would be the consequences for the parties of a refusal to extend time?
In weighing up all the relevant circumstances and the interests of fairness and justice, the judge placed greater weight on the desirability of finality over the denial of any remedy for BBL for its claim in respect of overpaid VAT. He reached this conclusion in the light not only of the very long delay, but also in the light of the fact that BBL made a conscious decision in 2012 not to pursue an appeal having taken professional advice. He therefore refused leave to BBL to amend its Notice of Appeal.
This case demonstrated how BBL had wished to rewrite the decision that they had made on the basis of a letter from HMRC despite it being clear they had the opportunity to appeal several years before after advice from a big 4 professional advisor and HMRC making it clear that that they were not making a fresh decision. It would have been surprising if the Tribunal had allowed them to do so.
[1] This is an application by HMRC that the Appellant's (“BBL”) appeal be struck out on the grounds that the Tribunal has no jurisdiction in respect of these proceedings, or alternatively that the Tribunal should not exercise its discretion to allow BBL to amend its Notice of Appeal to allow them to make an appeal out of time.
[2] BBL were represented by Mr Tack of DLA Piper LLP, HMRC were represented by Mr Mantle. An agreed bundle of documents was put before me in evidence.
[3] The background facts (insofar as are relevant to this decision) are not in dispute, and I find them to be as follows.
[4] BBL is a bingo operator. The fact pattern relating to the supplies in issue in this appeal is similar to the fact pattern considered by this Tribunal in Carlton Clubs plc [2011] TC 01389. The decision in Carlton Clubs was issued on 9 August 2011.
[5] Between November 2011 and January 2012 there was correspondence between KPMG (who were the Appellant's representatives at the time) and HMRC notifying HMRC of BBL's intention to make an adjustment to its VAT returns under regulation 38, VAT Regulations 1995. BBL issued an “internal credit note” in order to adjust the amount of consideration for bingo session income for the period from 1 January 1997 to 30 September 2004, which was recognised in the 12/11 VAT return. On 21 January 2012, the Appellant filed its 12/11 VAT return electronically, which included a claim for a refund of £1,616,384.44 output VAT that had been overpaid.
[6] On 3 July 2012, HMRC issued a decision letter rejecting the claim. The decision letter set out BBL's rights of appeal.
[7] On 14 September 2012, KPMG (who then represented BBL) wrote to HMRC confirming that BBL did not intend to appeal against the decision. In its letter KPMG stated:
Whilst [BBL] accepts that the decision in Carlton Clubs Plc does not create any binding precedent, the rejection of this claim is clearly at odds with the Tribunal's reasoning in their decision which HMRC chose not to appeal. Indeed, it was on this basis that [BBL] proceeded to make the adjustment which you now challenge. However, our client recognises that other subsequent challenges have been made in other areas and other ongoing challenges. In the light of further costs involved, our client has decided not to challenge your decision on this specific matter.
[8] On 19 September 2016, DLA Piper (who are now representing BBL) wrote to HMRC referring to the regulation 38 adjustment made in the 12/11 VAT return, and seeking “repayment of the balance of the 12/11 return” (namely £1,616,384.44), and referring to the decision of the First Tier Tribunal in K E Entertainments Ltd [2016] TC 05257. On 5 October 2016 HMRC replied, noting KPMG's letter of 14 September 2012 and BBL's decision not to appeal the 3 July 2012 decision letter. HMRC invited submissions for a possible late statutory review. Further correspondence between DLA Piper and HMRC followed, including a letter from DLA Piper to HMRC dated 7 November 2016 asking HMRC to make a decision on whether the regulation 38...
To continue reading
Request your trial
-
GLL BVK Internationaler Immobilien Spezialfonds and Another v Revenue and Customs Commissioners
...(see, for example, Alpha International Accommodation Ltd [2017] TC 06185) or a notice of appeal (see, for example, Buckingham Bingo Ltd [2018] TC 06487). [57] The argument that rule 5(3)(c) confers on the FTT a general discretionary power to amend claims, returns, elections or other documen......
-
Buckingham Bingo Ltd v Revenue and Customs Commissioners
...to process the 12/11 return), against which BBL had made an in-time appeal to the FTT. The FTT had rejected all three arguments ([2018] TC 06487). BBL appealed to the UT against the FTT's decision on the following grounds: the FTT had made an error in concluding that there is a time limit f......