Pierre Andre Divisia v The Commissioners for HMRC

Pierre Andre Divisia v The Commissioners for HMRC

HMRC’s VAT assessment was made to the best of their judgment based on material provided by PAD, and PAD did not demonstrate that the calculation was incorrect. However, HMRC could not reasonably have been satisfied that there were grounds to withdraw PAD’s authorisation to use the Flat Rate Scheme retrospectively, as there was no abuse or risk to the revenue, and PAD had ceased trading.

Parties
Appellant: Pierre Andre Divisia; Respondents: The Commissioners for His Majesty’s Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
11 September 2024
Procedural Posture
Tax Appeal / First Tier Tribunal Judgment
Outcome
Appeal allowed in part
Legal Topics
Value Added Tax, Best Judgment Assessment, Flat Rate Scheme, Withdrawal of Authorisation, Protection of Revenue
Tax Law Value Added Tax Best Judgment Assessment Flat Rate Scheme Withdrawal of Authorisation Protection of Revenue

Case Brief

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Parties

Pierre Andre Divisia

Appellant

The Commissioners for His Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / First Tier Tribunal Judgment

Legal Issues

  1. 1 Whether HMRC’s VAT assessment was made to best judgment under section 73(1) VATA 1994
  2. 2 Whether HMRC could reasonably have been satisfied that there were grounds to withdraw the taxpayer’s authorisation to use the Flat Rate Scheme under regulation 55P VAT Regulations 1995

Ratio Decidendi

HMRC’s VAT assessment was made to the best of their judgment based on material provided by PAD, and PAD did not demonstrate that the calculation was incorrect. However, HMRC could not reasonably have been satisfied that there were grounds to withdraw PAD’s authorisation to use the Flat Rate Scheme retrospectively, as there was no abuse or risk to the revenue, and PAD had ceased trading.

Court Disposition

Appeal allowed in part

Orders

  • The VAT assessment is to be reduced to reflect PAD’s outputs as determined by HMRC but calculated using the applicable Flat Rate Scheme rate(s).
  • The parties are to agree the amount; liberty to apply to the tribunal if unable to agree.