David Peters Ltd v Revenue & Customs [2012] UKFTT 124 (TC) (10 February 2012)

David Peters Ltd v Revenue & Customs [2012] UKFTT 124 (TC) (10 February 2012)

The Tribunal held that there was a valid and unconditional contract for the sale of specific, ascertainable goods between Thorneycroft and the Appellant, with payment made and goods identified by serial number. The right to deduct input tax arises even if delivery is postponed, as ownership passed to the Appellant. The Appellant acted in good faith and was not party to the supplier's fraud. The facts distinguished this case from Pennystar and Icon Construction, as the goods existed, were identified, and invoices were issued. Therefore, the Appellant is entitled to reclaim the input VAT and the interest charged must be repaid.

Citation
[2012] UKFTT 124
Parties
Appellant: David Peters Ltd; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
10 February 2012
Procedural Posture
VAT Input Tax Appeal / First Tier Tribunal (tax) Decision
Outcome
Appeal allowed
Legal Topics
Value Added Tax (vat), Input Tax Credit, Supply of Goods, Sale of Goods Act, Fraud and Innocent Party Rights
Tax Law Commercial Law Value Added Tax (vat) Input Tax Credit Supply of Goods Sale of Goods Act Fraud and Innocent Party Rights

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 6 Party arguments 2 Amounts and remedies 2
Sign in to unlock

Parties

David Peters Ltd

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

VAT Input Tax Appeal / First Tier Tribunal (tax) Decision

Legal Issues

  1. 1 Whether there was a supply of machinery by Thorneycroft to the Appellant for the purposes of s.24 VATA 1994
  2. 2 Whether the Appellant is entitled to credit for input tax on goods paid for but not delivered
  3. 3 Whether interest payments are due by the Appellant and if so how much

Ratio Decidendi

The Tribunal held that there was a valid and unconditional contract for the sale of specific, ascertainable goods between Thorneycroft and the Appellant, with payment made and goods identified by serial number. The right to deduct input tax arises even if delivery is postponed, as ownership passed to the Appellant. The Appellant acted in good faith and was not party to the supplier's fraud. The facts distinguished this case from Pennystar and Icon Construction, as the goods existed, were identified, and invoices were issued. Therefore, the Appellant is entitled to reclaim the input VAT and the interest charged must be repaid.

Court Disposition

Appeal allowed

Orders

  • Assessment for disallowed input tax and interest is set aside
  • Appellant is entitled to reclaim input VAT for the relevant period