BMW AG & Anor, R (on the application of) v HM Revenue & Customs

BMW AG & Anor, R (on the application of) v HM Revenue & Customs

HMRC's policy to require alignment of VAT accounting periods for associated companies is lawful and rational, as associated companies can systematically secure cash flow advantages not available to non-associated traders, justifying differential treatment. HMRC has statutory power to revoke or alter permissions regarding VAT accounting periods. The decision-making process was not flawed as alleged; HMRC was not required to consider hypothetical scenarios or minor third-party supplies not raised as live issues at the time of decision.

Parties
Applicant/respondent: BMW AG & Another; Respondent/appellant: Commissioners for HM Revenue & Customs
Jurisdiction
England and Wales
Judgment Date
18 February 2009
Procedural Posture
Judicial Review/appeal / Court of Appeal Judgment on Appeal From Administrative Court
Outcome
Appeal allowed. Respondent's application for permission dismissed. Direction that BMW AG should account quarterly restored.
Legal Topics
VAT Accounting Periods, HMRC Policy, Judicial Review, Discrimination in Tax Administration, Cash Flow Advantage, Statutory Interpretation
Tax Law Administrative Law European Union Law VAT Accounting Periods HMRC Policy Judicial Review Discrimination in Tax Administration Cash Flow Advantage +1 more

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Parties

BMW AG & Another

Applicant/respondent

Commissioners for HM Revenue & Customs

Respondent/appellant

Procedural Posture

Judicial Review/appeal / Court of Appeal Judgment on Appeal From Administrative Court

Legal Issues

  1. 1 Whether HMRC's policy to align VAT accounting periods for associated companies is lawful and rational
  2. 2 Whether HMRC had power to revoke permission for monthly VAT returns
  3. 3 Whether the decision-making process was flawed for failure to consider third-party supplies and hypothetical scenarios

Ratio Decidendi

HMRC's policy to require alignment of VAT accounting periods for associated companies is lawful and rational, as associated companies can systematically secure cash flow advantages not available to non-associated traders, justifying differential treatment. HMRC has statutory power to revoke or alter permissions regarding VAT accounting periods. The decision-making process was not flawed as alleged; HMRC was not required to consider hypothetical scenarios or minor third-party supplies not raised as live issues at the time of decision.

Court Disposition

Appeal allowed. Respondent's application for permission dismissed. Direction that BMW AG should account quarterly restored.

Orders

  • HMRC's appeal allowed.
  • BMW AG's application for permission dismissed.