Highsize Ltd
| Jurisdiction | UK Non-devolved |
| Judgment Date | 11 February 1992 |
| Date | 11 February 1992 |
| Court | Value Added Tax Tribunal |
VAT Tribunal
The following case was referred to in the decision:
Silvermere Golf and Equestrian Centre Ltd VAT(1981) VATTR 106; (1981) 1 BVC 1158
Assessment - Supplies made to appellant company - Output tax on supplies paid to supplier although work should have been zero-rated - Input tax repaid to appellant by commissioners - Commissioners repaid output tax to supplier which did not pay it over to appellant - Whether appellant liable for "output tax" on credit note issued by supplier - Value Added Tax Act 1983 section 14Value Added Tax Act 1983, sec. 14; Value Added Tax Act 1983 schedule 7 subsec-or-para 4Sch. 7, para. 4and 6.
The issue was whether the mere issue by a trader, who had made supplies, of a credit note to the recipient of those supplies rendered the latter liable immediately to repay to the commissioners any input tax claimed in respect of the services covered by that credit note.
The appellant ran a hotel. A builder, HC Ltd, carried out certain work on the premises, a listed building. Although the supplies were zero-rated the supplier insisted on tax being paid and the appellant acceded to this. A dispute arose between the parties leading subsequently to litigation. HC Ltd went into receivership. Meanwhile, unknown to the appellant. HC Ltd had issued a credit note which induced the commissioners to repay output tax to it without it paying that sum over to the appellant.
An officer visited the appellant and issued an assessment on the basis that appropriate action had not been taken on the credit note to adjust the output tax payable to the extent supposedly credited by HC Ltd to the appellant.
The appellant contended that it had been unaware of the credit note, were unwilling to take action on it and could not be obliged by statute to do so.
The commissioners contended that upon the issue of the credit note by HC Ltd the appellant was obliged to reduce the amount of input tax claimed by it.
Held, allowing the company's appeal:
1. There was no statutory provision which provided that any action should or should not be taken by a taxable person on receipt by him of a credit note, which included tax, from a person to whom he had paid an amount of money which included tax.
2. Given that the appellant had not received the credit note and was not given a copy by the commissioners until 11 months after it had been issued the appellant could not have accepted it before the assessment was notified. Thereafter the company protested its unwillingness to take action on the credit note and was under no obligation to do so.
[The tribunal set out the facts summarised above and continued as follows.]
The credit note is dated 17 February 1989. There is on it a date-stamp; no doubt, this would show the date upon which the commissioners received it, but for the fact that it is illegible. That date was not revealed in evidence. Mr Bhimji [appellant's managing director] said, and I accept, that he knew nothing of the credit note until it was mentioned to him by Miss Pinkham [Customs officer]. He had never received a copy, and the first time he saw one was when Miss Pinkham supplied to him a copy in January 1990. The credit note is on the face of it perfectly valid, and it was not contended otherwise. The commissioners repaid the amount of tax to [Horton Construction Ltd ("Horton")], on a date which was not revealed. Horton has failed, and perhaps refused, to pay that sum to the appellants.
It is difficult to understand what purpose could have been served by the commissioners repaying the tax to Horton. The commissioners clearly...
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IMO Precision Controls Ltd
...No. 2667; (1988) 3 BVC 718 Creditgrade Ltd VAT(LON/89/936) No. 5390; (1990) 5 BVC 895 Highsize Ltd VAT(LON/90/945) No. 7098; [1992] BVC 680 Howard VAT(LON/80/457) No. 1106; (1981) 1 BVC 1155 Morshan Contractors Ltd VAT(MAN/84/202) No. 1861; (1985) 2 BVC 208,065 Syston Tooling and Design Co ......