The Commissioners for HM Revenue and Customs v GMAC UK PLC (formerly General Motors Acceptance Corporation (UK) PLC and British Telecommunications v The Commissioners for HM Revenue and Customs

CourtUpper Tribunal (Tax and Chancery Chamber)
JudgeMr Justice Warren,Judge Hellier
Date03 August 2012
SubjectTax,3 August 2012
Publication Date01 December 2016
1
VAT Bad debt relief – Insolvency Condition, Property Condition – whether valid
under EU law – No; whether repayment claim resulted in a windfall contrary to EU
law – need for reference – Yes; Time limit for making claims – whether time-barred
as a result of overriding provisions of EU law
[2012] UKUT 279 (TCC)
Appeal number: FTC/52/2010
IN THE UPPER TRIBUNAL
TAX AND CHANCERY CHAMBER
THE COMMISSIONERS FOR HER MAJESTY’S REVENUE AND
CUSTOMS Appellants
- and-
GMAC UK PLC
(formerly GENERAL MOTORS ACCEPTANCE CORPORATION (UK) PLC)
Respondent
AND Appeal number: FTC/05/2012
BRITISH TELECOMMUNICATIONS PLC Appellant
- and -
THE COMMISSIONERS FOR HER MAJESTY’S REVENUE AND CUSTOMS
Respondents
Tribunal: Mr Justice Warren, Chamber President
Judge Charles Hellier
Sitting in public in London on 13 – 15 February 2012
Paul Lasok QC and Eleni Mitrophanous instructed by the General Counsel and
Solicitor to HM Revenue and Customs
2
Roderick Cordara QC and Jessica Wells for GMAC UK PLC instructed by
KPMG LLP
Roderick Cordara QC and Lyndsey Frawley for British Telecommunications
PLC instructed by B T Legal
© CROWN COPYRIGHT 2012
3
DECISION
I. Introduction
1. There are two matters before us. The first is an appeal against the decision of the
Tax Chamber (Judge Wallace and Miss S C O’Neil) (“the Decision” and “the
Tribunal) which allowed the appeal of General Motors Acceptance Corporation
(UK) PLC (“GMAC’) against HMRC's refusal of VAT bad debt relief in relation
to supplies of cars made on hire-purchase (“hp”) terms between 1978 and 1997.
The second is the determination of 3 preliminary issues within a tax appeal by
British Telecommunications PLC (“BT”) currently proceeding in the Tax
Chamber. These issues have been agreed between the parties and have been
referred to the Tax and Chancery Chamber pursuant to the relevant procedural
rules. The preliminary issues raise some of the questions which arise in the
appeal. It has been convenient for the appeal and the preliminary issues to be
dealt with in one continuous hearing. In both cases, Paul Lasok QC and Eleni
Mitrophanous appear for HMRC; in the appeal, Roderick Cordara QC appears for
GMAC together with Jessica Wells and in the BT matter, he appears for BT
together with Lyndsey Frawley.
2. The appeal has been before us on a previous occasion when HMRC sought a
reference to the ECJ (as we will refer to the European Court of Justice as it used to
be called and to the Court of Justice, as it is now called, being part of the Court of
Justice of the European Union) of a number of preliminary points. We declined to
make a reference at that stage. We considered that if a reference were to prove
necessary at all, the appropriate time to make one would be after the hearing of the
appeal when we would have a better idea of precisely what question or questions
should be referred. We will return to this aspect of the appeal in due course. If a
reference is needed in the appeal, a reference may be needed in the BT case too.
The GMAC appeal
3. We deal with the appeal first. For the purposes of introducing the appeal, the facts
can be taken very shortly. GMAC supplied cars on hp terms. The customer would
agree to pay for the car by instalments. If the customer defaulted, GMAC would
repossess the car and sell it at auction. The auction proceeds reduced the balance
of the instalments due from the customer. We take by way of example the same
example as that provided by the Tribunal at [30] of the Decision (in turn taken
from the decision of Field J in earlier litigation to which we will come).
a. a customer agrees to pay £15,000 (plus interest) over the period of an hp
agreement;

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