Abbey National Plc v Customs and Excise

Abbey National Plc v Customs and Excise

The statutory and regulatory provisions requiring apportionment on a time or straight-line basis for VAT bad debt relief are lawful, rational, and override any contractual or accounting arrangements. There is no requirement in domestic or Community law to use the rule of 78 or actuarial method, and the straight-line method is a permissible and rational approach. The appeal is dismissed.

Parties
Appellant: Abbey National plc; Respondents: The Commissioners of Customs and Excise
Jurisdiction
England and Wales
Judgment Date
13 June 2005
Procedural Posture
VAT Appeal / High Court Appeal From VAT and Duties Tribunal
Outcome
Appeal dismissed
Legal Topics
Value Added Tax, Bad Debt Relief, Apportionment of Payments, Statutory Interpretation
Tax Law Commercial Law Value Added Tax Bad Debt Relief Apportionment of Payments Statutory Interpretation

Case Brief

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Parties

Abbey National plc

Appellant

The Commissioners of Customs and Excise

Respondents

Procedural Posture

VAT Appeal / High Court Appeal From VAT and Duties Tribunal

Legal Issues

  1. 1 Whether the straight-line method of apportionment for VAT bad debt relief is lawful and rational under UK and Community law
  2. 2 Whether contractual arrangements between finance company and customer override statutory apportionment rules
  3. 3 Whether the rule of 78 or actuarial method should be used for apportionment instead of the straight-line method

Ratio Decidendi

The statutory and regulatory provisions requiring apportionment on a time or straight-line basis for VAT bad debt relief are lawful, rational, and override any contractual or accounting arrangements. There is no requirement in domestic or Community law to use the rule of 78 or actuarial method, and the straight-line method is a permissible and rational approach. The appeal is dismissed.

Court Disposition

Appeal dismissed

Orders

  • The appeal by Abbey National plc is dismissed.