The University of Edinburgh
| Jurisdiction | UK Non-devolved |
| Judgment Date | 17 October 1991 |
| Date | 17 October 1991 |
| Court | Value Added Tax Tribunal |
VAT Tribunal
The following case was referred to in the decision:
Wilson Tupholme Ltd (MAN/81/208) No. 1460
Input tax - Partial exemption - Whether an oral agreement between taxpayer and commissioners not to claim residual input tax - Value Added Tax Act 1983, Value Added Tax Act 1983 section 15sec. 15; SI 1985/886 regulation 30Value Added Tax (General) Regulations 1985 (SI 1985/886), reg. 30.
The issue was whether the appellant, a partially exempt body, was entitled to reclaim input tax paid in respect of certain taxable supplies made to it.
Because of their partial exemption status special arrangements were made between Universities, including the appellant, and the commissioners for separate accounting to take place for each taxable activity while at the same time with certain exceptions input tax could be offset against output tax in relation to each activity. In certain areas where both taxable and exempt supplies arose special agreement had to be made locally and, where residual input tax was incurred, annual adjustments were necessary. In fact, the appellant did not claim any residual input tax until a certain point when a request was made to the commissioners to allow a claim for the recovery of overpaid tax resulting from an underclaim of input tax in the years between 1984 and 1990.
The commissioners alleged that an oral agreement had been made between the parties to the effect that non-attributable input tax would not be claimed, contending that the fact that residual input tax had not been reclaimed during the relevant period was evidence that such an agreement had been reached.
The appellant denied any such agreement had been made, contending that since the effect of it would have been to deprive a taxpayer of a right he would otherwise have had the onus was on the commissioners to establish its existence.
Held, allowing the University's appeal:
No such agreement had been established before the tribunal. It was perfectly open for a taxpayer not to reclaim input tax if he did not choose to for any reason, but this did not mean that he had thereby made an agreement never to make such a claim.
From the evidence Miss Neil [for the commissioners] sought to establish that there was a further special method of calculation of the appellant's tax agreed in 1977 whereby they would not claim any refund of residual...
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