Chelham Ltd v Revenue & Customs [2013] UKFTT 418 (TC) (31 July 2013)

Chelham Ltd v Revenue & Customs [2013] UKFTT 418 (TC) (31 July 2013)

Chelham Limited’s claim for input tax deduction failed because the VAT related to exempt supplies, making it non-deductible under VAT law. The refusal to allow backdated VAT group treatment was reasonable and consistent with HMRC policy, with no exceptional circumstances present. The decision to deregister Chelham for VAT was correct as it made only exempt supplies. Penalties were upheld as there was no reasonable excuse for incorrect VAT returns.

Citation
[2013] UKFTT 418
Parties
Appellant: Chelham Limited; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
31 July 2013
Procedural Posture
VAT Appeal (first Tier Tribunal Tax Chamber) / Final Judgment After Hearing and Written Submissions
Outcome
Appeal dismissed
Legal Topics
Value Added Tax, Input Tax Deduction, VAT Group Registration, VAT Deregistration, Penalties
Tax Law Value Added Tax Input Tax Deduction VAT Group Registration VAT Deregistration Penalties

Case Brief

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Parties

Chelham Limited

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

VAT Appeal (first Tier Tribunal Tax Chamber) / Final Judgment After Hearing and Written Submissions

Legal Issues

  1. 1 Whether input tax claimed by Chelham Limited in relation to services supplied by its subsidiary Perrie Limited is deductible
  2. 2 Whether the decision to deregister Chelham Limited for VAT ought to be upheld
  3. 3 Whether refusal of Chelham Limited’s application for backdated VAT group treatment was unreasonable

Ratio Decidendi

Chelham Limited’s claim for input tax deduction failed because the VAT related to exempt supplies, making it non-deductible under VAT law. The refusal to allow backdated VAT group treatment was reasonable and consistent with HMRC policy, with no exceptional circumstances present. The decision to deregister Chelham for VAT was correct as it made only exempt supplies. Penalties were upheld as there was no reasonable excuse for incorrect VAT returns.

Court Disposition

Appeal dismissed

Orders

  • Assessments for VAT periods 12/06, 03/07, and 03/08 upheld
  • Decision to disallow input tax deduction for period 03/09 upheld