Taylor Clark Leisure Plc v Revenue and Customs Commissioners
| Jurisdiction | Scotland |
| Judgment Date | 26 May 2015 |
| Neutral Citation | [2015] CSIH 40 |
| Date | 26 May 2015 |
| Court | Court of Session (Inner House) |
Lady Clark of Calton
Simpson QC; Burness Paul LLP
Young QC; Office of the Advocate General
Value added tax – Fleming claims – Leave to appeal decision of Upper Tribunal – Rule of court 41.57 – Tribunals, Courts and Enforcement Act 2007 (“TCEA 2007”), s. 13(4) and (7) – Whether important point of principle or other compelling reason to hear appeal and whether reasonable prospect of success – Yes on first ground of appeal – No on second – Leave to appeal granted on first ground only.
The Scottish Court of Session granted the applicant permission to appeal the decision of the Upper Tribunal (UT) in Taylor Clark Leisure plc v R & C Commrs VAT[2014] BVC 536 finding that one of the grounds of appeal raised issues regarding the concept and legal implications of the fictional single taxable person (the VAT group) in the context of whether a claim by a group member, rather than the representative member, could succeed as a claim on behalf of the group as a whole, which meant the requirement of rule of court 41.57, that the appeal raise some important point of principle, was met. The applicant further had the necessary reasonable prospect of success in relation to that ground of appeal.
The applicant, Taylor Clark Leisure Plc, was the former representative member of a VAT group seeking repayment of four “Fleming” claims that had been submitted by its wholly owned subsidiary company (Carlton) after it had left the VAT group. The claims were in respect of output tax overpaid in respect of activities that had initially been carried on by the applicant prior to Carlton's incorporation but then transferred to Carlton and carried on by Carlton thereafter.
In Taylor Clark Leisure plc v R & C Commrs VAT[2014] BVC 536, the UT had confirmed the First-tier Tribunal (FTT) decision that the claims were time-barred because although a claim had been made within the time limits, it had been made by Carlton and not the applicant and it was the applicant, as the representative member of the VAT group, who were required to have made the claim. The UT had further found that the applicant (as the VAT group representative member) was the person entitled to claim and receive the repayment and the FTT had been wrong to hold that the applicant was not the entitled person. However, as no claim had been made by the applicant, the appeal had been dismissed.
A review of and permission to appeal the UT's decision had subsequently been refused by the judge of the UT and the applicant had, therefore, submitted the application to Scottish Court of Session as the appellate court.
Lady Clark of the Scottish Court of Session initially noted that the test for leave to appeal was governed by rule of court 41.57 in respect of applications made under the Tribunals, Courts and Enforcement Act 2007 (“TCEA 2007”), s. 13(4) for permission to appeal a decision falling within s. 13(7). That rule provided that permission to appeal should not be granted unless the appeal raised some important point of principle or there existed some other compelling reason for the appeal to be heard.
The applicant's first ground for appeal was that the time-bar question ought to be regarded from the perspective that the applicant and Carlton were the same “single taxable person” for VAT purposes so that the VAT group could rely on the claims that Carlton had made. The second ground, submitted as an alternative, was that the applicant and Carlton were different legal persons for VAT purposes but the Value Added Tax Act 1994 (“VATA 1994”), s. 80 could be construed in favour of the applicant succeeding.
Lady Clark noted that the UT judge had taken a straight forward approach to the time-bar question considering VATA 1994, s. 80 and its application to the facts of the case. However, Lady Clark considered the issues was more complex and that the concept and legal implications of the fictional single taxable person (the VAT group) which was to be treated in law as if it were a single taxable person raised issues to be resolved not only for the entitlement but for the time-bar issues also. The applicant's submissions that a VAT claim by a group member (even if it is no longer a member of the group) for VAT overpaid during the period of the group's existence could only be a claim for and on behalf of the group as a whole raised issues of law that ought to be determined after full submissions.
Accordingly, the first ground of appeal did raise an important point of principle of general importance and in respect of which the applicant also had a real prospect of success. The second ground of appeal, however, which was based on submissions on statutory construction that had been considered before both the FTT and UT and rejected, did not.
The...
To continue reading
Request your trial
-
Taylor Clark Leisure Plc v Revenue and Customs Commissioners
...refused permission to appeal to the Court of Session, but on 26 May 2015 the Court of Session (Lady Clark of Calton) granted permission ([2015] CSIH 40). The appeal called before an Extra Division (Lord Menzies, Lady Smith, and Lord Drummond Young) for a hearing on the summar roll, on 2 Feb......