Silvermere Golf and Equestrian Centre Ltd
| Jurisdiction | UK Non-devolved |
| Judgment Date | 20 July 1981 |
| Date | 20 July 1981 |
| Court | Value Added Tax Tribunal |
VAT Tribunal
Assessment - Supplies made to appellant company - Tax on supplies paid by supplier and deducted as input tax by appellant - Commissioners repaid tax to supplier - Supplier issued credit note for the tax to appellant - Whether appellant liable to Commissioners for the tax - section 3 section 31 section 33Finance Act 1972, sec. 3, 31, 33 (now section 14 schedule 7 subsec-or-para 4VATA 1983, sec. 14, Sch. 7, para. 4 schedule 7 subsec-or-para 66).
Golf Landscapes Ltd. (GL) supplied goods and services to the appellant between April 1974 and September 1975. GL treated such supplies as chargeable to tax, issued tax invoices and accounted for such tax to the Commissioners. The appellants claimed as input tax the amounts shown on these tax invoices.
In 1978, as a result of a change of interpretation in the law, the Commissioners concluded that the foregoing supplies were zero-rated and not standard-rated. They permitted GL to reclaim the output tax they had paid. On 31 May 1978 GL purported to issue to the appellant a credit note and the Commissioners sought to recover from the appellant as output tax the amount which GL had reclaimed from them.
The Commissioners' officers made several visits to the appellant's premises and finally made an assessment in November 1980, the reason for which was stated to be "unactioned credit note from Golf Landscapes Ltd". The appellant contended that a trader who received a credit note was under no legal obligation to include the sum credited as output tax in a VAT return unless the money was paid over.
Held, allowing the taxpayer's appeal:
1. The appellant was under no duty to action the credit note by treating this amount as output tax.
2. The correct remedy, if input tax had been wrongly deducted, was to issue an assessment on that basis. In the present case there was no evidence to show that at the time the supplies were made input tax was wrongly deducted.
[The Tribunal set out the facts summarised above and continued as follows.]
…
Generally speaking a credit note may request money's worth, but in the present case we have no evidence whether the credit note was ever accepted by the appellant company as such or whether at the time when GL purported to issue this so-called credit note the companies were continuing to trade with each other. If it was not a valid credit note it certainly did not represent money's worth in the hands of the appellant company...
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