Cobol Ltd v Her Majesty's Revenue & Customs, V 20976
| Jurisdiction | UK Non-devolved |
| Judge | Lady MITTING |
| Judgment Date | 13 March 2009 |
| Respondent | Her Majesty's Revenue & Customs |
| Appellant | Cobol Ltd |
| Reference | V 20976 |
| Court | VAT & Duties Tribunal (UK) |
20976
Exemption – purchase of a commercial property- option to tax – did the Appellant make a genuine decision to opt – no – appeal dismissed
MANCHESTER TRIBUNAL CENTRE
COBOL LTD Appellant
- and -
Tribunal: Lady Mitting (Chairman)
Sitting in public in Birmingham on 16 February 2009
James Puzey, Counsel instructed by the General Counsel and Solicitor to Her Majesty’s Revenue and Customs for the Respondents
© CROWN COPYRIGHT 2009
DECISION
The Appellant appeals against a decision of the Commissioners to raise an assessment to recover input tax of £80,675 claimed by the Appellant in its return for 03/04, the tax having been paid by the Appellant on its purchase of a commercial property which it subsequently leased out.
On behalf of the Appellant, oral evidence was given by its sole director and shareholder Mr. Stewart Walker and for the Respondents by Officers Sarah Dean and Deborah Hardwick.
Schedule 9, Group 1 VAT Act 1994 exempts from tax the grant of any interest in or right over land or any license to occupy land. Schedule 10 allows an election to be made, the effect of which would be to waive the exemption and the grant would revert to a standard rated supply on which output tax has to be charged and accounted for.
It was common ground that the mechanism for opting to tax is a two stage process. First the decision to opt is made. Secondly the Commissioners have to be notified of the decision, normally within 30 days although they do have a discretion to accept a belated notification which they will normally do provided they are satisfied that a genuine decision to opt had been made. To test the validity of the decision the Commissioners look at all the available evidence but they would, for example, need to see that output tax had been properly charged and accounted for from the date of the supposed election.
The Appellant’s case to the tribunal was that it had made a genuine option to tax but had omitted to notify the Commissioners who were wrong in refusing to accept belated notification. The Commissioners did not accept a genuine decision to opt had been made. The single issue before the tribunal was whether or not the Appellant had made a genuine decision to opt to tax. On behalf of the Commissioners, Mr. Puzey advised the tribunal that if we were to find that a valid decision had been made, the Commissioners would accept late notification.
Mr. Walker set up Cobol in 1990. The company trades from its own freehold premises in Loughborough and supplies a commercial...
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