Emblaze Mobility Solutions Ltd v The Commissioners for HM Revenue and Customs
| Jurisdiction | UK Non-devolved |
| Judge | Mr Justice Marcus Smith |
| Neutral Citation | [2018] UKUT 0373 (TCC) |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
| Subject Matter | Tax,23 November 2018 |
| Date | 23 November 2018 |
| Published date | 23 November 2018 |
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[2018] UKUT 0373 (TCC)
Appeal number: UT/2014/0049
VAT - Interest - application for interest under section 84(8) VATA - rate of interest
- deduction of repayment supplement
UPPER TRIBUNAL
TAX AND CHANCERY CHAMBER
EMBLAZE MOBILITY SOLUTIONS LIMITED
Appellant
- and -
THE COMMISSIONERS FOR HER MAJESTY’S
REVENUE AND CUSTOMS
Respondents
TRIBUNAL:
The Honourable Mr Justice Marcus Smith
Sitting in public at The Rolls Building, Fetter Lane, London EC4A 1NL on 23
October 2018
Leigh-Ann Mulcahy, QC, instructed by The Khan Partnership LLP, for the
Appellant
Philip Moser, QC and Nicholas Macklam, instructed by the General Counsel and
Solicitor to HM Revenue and Customs, for the Respondents
© CROWN COPYRIGHT 2018
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DECISION
A. INTRODUCTION
(1) The factual background
1. On 13 April 2006, Global Telecoms Distribution Ltd (“Global”) submitted
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a VAT return for the VAT Accounting Period 03/06 (that is, for the quarter ending
31 March 2006) in which it claimed an input tax repayment of £8,444,651. The
basis on which that claim was made, and the reasons for the Respondents’
(“HMRC’s”) refusal of that claim, are immaterial for the purposes of this appeal.
2. On 20 December 2006, Global filed a notice of appeal against HMRC’s
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decision refusing the repayment claim (the “Appeal”).
3. On 30 May 2007, Global was placed into administrative receivership. On
16 January 2008, Global (acting by its receivers) assigned all its rights, interest
and title in the appeal to the Appellant (“Emblaze”), which was a 51% shareholder
in Global and an unsecured creditor of Global. On 29 February 2008, Emblaze
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was substituted for Global in the Appeal.
4. The Appeal was allowed, with costs. For reasons that are again immaterial
for present purposes, HMRC did not make the repayment to Emblaze. This
resulted in proceedings before the High Court, which were concluded in part by
a consent order dated 18 July 2011, under which HMRC agreed to pay Emblaze
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a total of £7,333,716.84 comprising:
(1) £6,911,433.66 in respect of the repayment claim; and
(2) £422,282.51 by way of “repayment supplement” under section 79 of the
Value Added Tax Act 1994 (“VATA”).
5. It is helpful to set out here the relevant parts of section 79 VATA, which
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provides as follows:
“Repayment supplement in respect of certain delayed payments or refunds
(1) In any case where –
(a) a person is entitled to a VAT credit, or
…
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and the conditions mentioned in subsection (2) below are satisfied, the
amount which, apart from this section, would be due by way of that
payment…shall be increased by the addition of a supplement equal to 5 per
cent of that amount or £50, whichever is the greater.
(2) The said conditions are –
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