Nairn Golf Club
| Jurisdiction | UK Non-devolved |
| Judgment Date | 30 April 2015 |
| Date | 30 April 2015 |
| Court | First-tier Tribunal (Tax Chamber) |
Judge Anne Scott, LLB, NP, Mrs Eileen A Sumpter, WS
Mr Young appeared for the Appellant
Mr Brooke, Officer of HMRC, appeared for the Respondents
Value added tax – Strike-out application – Additional years added to existing claim – Application of four year time limits in Value Added Tax Act 1994 (“VATA 1994”), s. 80(4) – Held – Additional years were new claim – Could not override statutory time limit by adding years to existing claim – Sist cannot override statutory time limits – No appealable decisions for most recent four years – Strike out allowed.
The First-tier Tribunal (FTT) granted the application by HMRC to strike-out the Club's appeal in relation to a claim for a repayment of output VAT.
HMRC applied to strike-out the Club's appeal in relation to a claim for a repayment of output VAT for the period 1 October 2007 to 30 September 2013. That claim was made in a letter dated 30 January 2014 (“the 2014 claim”).
HMRC applied for the strike-out because:
1) the claims for the period 1 October 2007 to 31 December 2009 were outside s. 80(4). The statutory limit is that a reclaim must be within four years of the end of the prescribed accounting period;
2) there could be no valid appeal in respect of the claim for the period 1 January 2010 to 30 September 2013, as the claim for that period had not been rejected; and
3) any claim falls to be made under Value Added Tax Regulations 1995 (SI 1995/2518), reg. 37. Essentially, the calculations must be by reference to VAT periods, which in the case of the appellant must be by reference to the quarterly VAT periods and not by reference to the annual adjustment (para. 3 of the decision).
The appellant argued that the claims for the period 1 October 2007 to 1 December 2009 should be treated as made in time, since they amended an earlier claim made on 26 March 2009 (“the 2009 claim”) (para. 4 of the decision).
The 2009 claim covered the period 1 April 1991 to 31 December 1996 and the period 1 October 2005 to 30 September 2007. That total claim was rejected in a letter dated 5 June 2009. The Club appealed that decision and at the time of the hearing it was still sisted (para. 5 of the decision).
The jurisdiction of the FTT did not extend to considering the 2009 claim, other than to the extent of deciding whether the subject matter of the appeal was an extension of that claim (para. 13 of the decision).
The FTT held that there was no live appeal concerning 1 January 2010 to 31 December 2010 (para. 14 of the decision).
HMRC argued that the appeal cannot succeed because the 2014 claim cannot be treated as an amendment to the 2009 claim, because it relates to prescribed accounting periods that were not included in that claim (para. 18 of the decision).
The FTT held that there was no appealable decision for the period 1 January 2010 to 30 September 2013 and therefore they were not considered by the FTT. The appeal insofar as it related to that period was struck out (para. 21 of the decision).
There was no dispute that the 2009 claim was still outstanding (para. 25 of the decision).
Nothing in the claim letter suggested a protective claim for future years (para. 28 of the decision).
The core subject matter of both the 2009 and 2014 claims was green fees. The law used to claim was the same in both cases, but the two claims concerned different periods (para. 30 of the decision).
The FTT held that there was no basis on which the 2014 claim could be an amendment or extension of the 2009 claim (para. 34 of the decision).
The FTT held that the appellant did not a legitimate expectation that, because the 2009 claim had been sisted, all subsequent years would be treated in the same way (para. 40 of the decision).
In allowing HMRC's application to strike out the appeal, the FTT held that there were two separate claims. The 2014 claim was a new claim. The 2009 claim did not, and could not, include a claim, in terms of the relevant legislation, for subsequent periods. A sist of proceedings cannot operate to amend a statutory time-limit (para. 42 of the decision).
There is no definition of “claim” in VATA 1994, nor any provision for amending a claim. Any right to repayment is an individual, discrete claim, i.e. separate from any other, unless it is shown to be essentially one with an earlier claim. The taxpayer is responsible for ensuring that claims are made in time. A sist affects only the appeal which is sisted, i.e. a claim that was made in time. It cannot affect claims that have not yet been made or might never be made.
[1] This is an application by HMRC to strike-out the appellant's appeal in relation to a claim for a repayment of output VAT for the period 1 October 2007 to 30 September 2013 in the sum of £185,532.66. That claim was made by way of a letter dated 30 January 2014 (“the 2014 claim”).
[2] The application for strike-out, dated 13 October 2014, was made in terms of rule 8(3)(c) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (“the Rules”). We annex a copy of all relevant extracts from the rules at Appendix 1.
[3] On 12 February 2015, HMRC clarified the basis of their application for strike-out and argued that:–
a) the claims for the period 1 October 2007 to 31 December 2009 could not be admitted as those periods fall outside the provisions of section 80(4) Value Added Tax Act 1994 (“VATA”). The statutory limit is that a VAT reclaim has to be made within four years of the end of the prescribed accounting period.
b) there could be no valid appeal in respect of the claim for the period 1 January 2010 to 30 September 2013 as the claim for that period had not been rejected, and
c) any claim falls to be made in terms of regulation 37 of the VAT Regulations 1995; in essence the calculations must be by reference to VAT periods which in the case of the appellant must be by reference to the quarterly VAT periods and not by reference to the annual adjustment.
[4] The appellant argues that the claims for the period 1 October 2007 to 1 December 2009 should be treated as made in time since they are amendments to an earlier claim made on 26 March 2009 (“the 2009 claim”).
[5] The 2009 claim covered the periods 1 April 1991 to 31 December 1996 in the sum of £81,692 and the period 1 October 2005 to 30 September 2007 in the sum of £52,972.41. That total claim, in the sum of £134,664.4, was rejected by way of a letter dated 5 June 2009. The appellant appealed that decision to the Tribunal and it is an appeal reference TC/2009/12696. It is currently sisted.
[6] The 2009 claim was intimated by way of a letter with calculations covering each of the relevant years. It was broadly stated to be a Fleming claim pending the outcome of the ECJ's decision in the Canterbury Hockey Club v R & C Commrs ECASVAT(Case C-253/07) [2008] BVC 824 case. The relevant paragraphs on which the appellant now founds reads as follows:–
I have therefore used an approximation to prepare the later years in the 1990s and in order to progress we have also used an approximation in the 2006 and 2007 claims.
When it is announced that the Revenue are going to process claims to implement the Canterbury decision then I would expect that I would be able to go through the individual invoices for the later years to extract the information to be able to refine the claim further. The input tax involved in these two categories is of course relatively minor.
If of course you feel that there is anything further that should be done to protect the Club's position in view of the impending time limits it would be helpful if you could bring this to my attention.
[7] That claim was rejected on 5 June 2009 on the basis that the Canterbury decision had no impact on the restriction of the exemption for sporting services in article 134(b) of EC VAT Directive 2006/112 (previously article 13(A)(2)(b) of the Sixth Directive.
[8] In fact, the Fleming claim was only the claim in relation to 1 April 1991 to 31 December 1996. Further the appeal was sisted originally behind the Chipping Sodbury Golf Club TAX[2012] TC 02234 case and latterly behind R & C Commrs v Bridport and West Dorset Golf Club Ltd ECASVAT(Case C-495/12) [2014] BVC 1. The current position in that regard is that Judge Bishopp issued Directions released on 29 January 2015 following a hearing on 22 January 2015 stating that:
All the appellants whose names appear on the attached list and which are not represented by KPMG LLP shall by, no later than 4 April 2015, inform the Tribunal that:
a) they wished their appeals to be stayed, as related appeals; or
b) they do not so wish (giving reasons for not wishing that their appeals be related cases);
and, in either case, shall state whether there are any issues additional to those set out in the list of common related issues referred to at paragraph 7 above which remain outstanding in their appeals, and if so identifying them.
[9] The appellant argued that HMRC's position was unclear in regard to the 2009 claim and asked that this Tribunal recall that sist. We intimated that we could only consider the subject matter of the application for strike-out and that any arguments or applications in regard to the 2009 appeal would have to be considered in the context of that appeal itself.
[10] We therefore refuse the application by the appellant to “lift the sist” in TC/2009/12696 since that appeal is not the subject matter of today's hearing. Any such application should be submitted to the Tribunal administration under that reference.
[11] Mr Brooke very helpfully confirmed that it was anticipated that there would be a repayment in regard to the 2009 claim. However, it would be subject to an argument on unjust enrichment. HMRC's stance on that was very clear.
[12] Mr Young argued that the 2009 claim had been outstanding for an exceedingly long time and...
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