Totel Ltd v Revenue And Customs

Totel Ltd v Revenue And Customs

The appeal is dismissed because the prepayment rule for VAT appeals does not infringe the EU law principle of equivalence. The 'no most favourable treatment' proviso applies: it is sufficient that VAT appeals are treated no less favourably than other indirect tax appeals subject to the same prepayment rule. VAT is not sufficiently similar to income tax or SDLT appeals for the purposes of the equivalence principle, and there is no requirement to extend the more favourable rules applicable to those taxes to VAT appeals. There is no breach of EU law, and no justification for the difference in treatment is required.

Parties
Appellant: Totel Limited; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
20 December 2016
Procedural Posture
Civil Appeal (tax) / Appeal From Upper Tribunal (tax and Chancery Chamber) to Court of Appeal
Outcome
Appeal dismissed
Legal Topics
VAT Appeals, Prepayment Rule, Principle of Equivalence, EU Law Remedies, Indirect Vs Direct Tax, Hardship Applications, Procedural Fairness
Tax Law European Union Law Administrative Law VAT Appeals Prepayment Rule Principle of Equivalence EU Law Remedies Indirect Vs Direct Tax +2 more

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Parties

Totel Limited

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

Civil Appeal (tax) / Appeal From Upper Tribunal (tax and Chancery Chamber) to Court of Appeal

Legal Issues

  1. 1 Does the prepayment rule for VAT appeals infringe the EU law principle of equivalence?
  2. 2 Are VAT appeals sufficiently similar to other tax appeals (e.g., income tax, SDLT) for the purposes of the equivalence principle?
  3. 3 Does the 'no most favourable treatment' proviso apply to the prepayment rule in VAT appeals?

Ratio Decidendi

The appeal is dismissed because the prepayment rule for VAT appeals does not infringe the EU law principle of equivalence. The 'no most favourable treatment' proviso applies: it is sufficient that VAT appeals are treated no less favourably than other indirect tax appeals subject to the same prepayment rule. VAT is not sufficiently similar to income tax or SDLT appeals for the purposes of the equivalence principle, and there is no requirement to extend the more favourable rules applicable to those taxes to VAT appeals. There is no breach of EU law, and no justification for the difference in treatment is required.

Court Disposition

Appeal dismissed

Orders

  • Appeal dismissed; no reference to the CJEU for a preliminary ruling; no change to the prepayment rule for VAT appeals.