Leigh Day (formerly Leigh Day & Co) v Revenue & Customs [2014] UKFTT 425 (TC) (09 May 2014)

Parties

Procedural Posture

VAT Appeal / First Tier Tribunal (tax Chamber) Judgment

Legal Issues

1. 1 Whether Regulation 38 of the VAT Regulations 1995 applies to allow refund of incorrect VAT charged to the Appellant
2. 2 Whether the letter from HMRC to the Appellant's adviser constitutes a valid notice of assessment under section 73(1) VAT Act 1994
3. 3 Whether the Appellant is entitled to repayment of VAT overpaid

Ratio Decidendi

Regulation 38 cannot be used to reclaim VAT that was incorrectly charged where there was no underlying VAT liability; it is limited to adjustments for changes in consideration. Leigh Day did not meet the requirements of Regulation 38, as the reduction in consideration was not reflected in its business accounts within the required period. The letter from HMRC dated 19 October 2007, although containing the necessary information for an assessment, was not properly notified to Leigh Day as required by section 73(1) VAT Act 1994, since it was sent only to their advisers and not to the taxpayer directly.

Court Disposition

Appeal dismissed

Orders

• Leigh Day’s claim for relief under Regulation 38 is refused
• No valid VAT assessment was notified to Leigh Day under section 73(1) VAT Act 1994