Zipvit Ltd v The Commissioners for HMRC

Zipvit Ltd v The Commissioners for HMRC

The absence of a VAT invoice showing VAT charged and paid by Royal Mail is fatal to Zipvit’s claim for input tax deduction, regardless of whether the contract was VAT-inclusive or VAT-exclusive. The requirement to produce a compliant VAT invoice is a mandatory precondition for exercising the right to deduct input tax under both EU and UK law, and cannot be satisfied by alternative evidence in this context.

Parties
Appellant: Zipvit Limited; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
29 June 2018
Procedural Posture
Civil Appeal / Appeal From Upper Tribunal (tax and Chancery Chamber) to Court of Appeal
Outcome
Appeal dismissed
Legal Topics
Value Added Tax (vat), Input Tax Deduction, VAT Invoices, Contract Interpretation, Retrospective Tax Liability, Procedural Requirements for Tax Credits
Tax Law European Union Law Value Added Tax (vat) Input Tax Deduction VAT Invoices Contract Interpretation Retrospective Tax Liability Procedural Requirements for Tax Credits

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Parties

Zipvit Limited

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

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

Legal Issues

  1. 1 Whether a taxable person who received supplies wrongly treated as VAT exempt is entitled to an input tax credit once it is established the supplies were standard-rated.
  2. 2 Whether the absence of a VAT invoice showing VAT charged and paid by the supplier is fatal to the recipient’s claim for input tax deduction.

Ratio Decidendi

The absence of a VAT invoice showing VAT charged and paid by Royal Mail is fatal to Zipvit’s claim for input tax deduction, regardless of whether the contract was VAT-inclusive or VAT-exclusive. The requirement to produce a compliant VAT invoice is a mandatory precondition for exercising the right to deduct input tax under both EU and UK law, and cannot be satisfied by alternative evidence in this context.

Court Disposition

Appeal dismissed

Orders

  • Zipvit’s appeal is dismissed.