Masterlease Ltd v Revenue & Customs [2010] UKFTT 339 (TC) (15 July 2010)

Masterlease Ltd v Revenue & Customs [2010] UKFTT 339 (TC) (15 July 2010)

Section 80(1) applies to claims for overpaid VAT where regulation 38 adjustments were not made in time, and in calculating the amount not due, any liability to VAT on repossessed cars sold must be brought into account. The 'same condition' requirement in article 4(1)(a) of the Cars Order is not absolute identity but requires substantial or material similarity; minor work (one or two hours, £50 on parts, excluding valeting) does not preclude de-supply, but more substantial work does. There is no basis in law to limit VAT to only the value added by remedial work.

Citation
[2010] UKFTT 339 (TC)
Parties
Appellant: Masterlease Ltd; Respondents: The Commissioners for Her Majesty’s Revenue and Customs (VAT)
Jurisdiction
United Kingdom
Judgment Date
15 July 2010
Procedural Posture
VAT Repayment Appeal / Decision in Principle; Quantification Adjourned
Outcome
Appeal adjourned for parties to agree figures based on de minimis approach; if no agreement, relisted for further evidence and submissions.
Legal Topics
VAT Repayments, Hire Purchase Agreements, Repossession of Goods, De Supply Provisions, Interpretation of 'same Condition' in VAT (cars) Order 1992
Tax Law VAT VAT Repayments Hire Purchase Agreements Repossession of Goods De Supply Provisions Interpretation of 'same Condition' in VAT (cars) Order 1992

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Parties

Masterlease Ltd

Appellant

The Commissioners for Her Majesty’s Revenue and Customs (VAT)

Respondents

Procedural Posture

VAT Repayment Appeal / Decision in Principle; Quantification Adjourned

Legal Issues

  1. 1 Whether Customs were entitled to offset underdeclared VAT on sale of repossessed cars against regulation 38 adjustments without an assessment now out of time
  2. 2 Whether, on interpretation of the VAT (Cars) Order 1992, the Appellant was liable to VAT on the sale of repossessed cars not in the 'same condition' as when repossessed
  3. 3 Whether VAT on sale should be limited to value added by remedial work

Ratio Decidendi

Section 80(1) applies to claims for overpaid VAT where regulation 38 adjustments were not made in time, and in calculating the amount not due, any liability to VAT on repossessed cars sold must be brought into account. The 'same condition' requirement in article 4(1)(a) of the Cars Order is not absolute identity but requires substantial or material similarity; minor work (one or two hours, £50 on parts, excluding valeting) does not preclude de-supply, but more substantial work does. There is no basis in law to limit VAT to only the value added by remedial work.

Court Disposition

Appeal adjourned for parties to agree figures based on de minimis approach; if no agreement, relisted for further evidence and submissions.

Orders

  • Parties to attempt agreement on figures within three months or agreed extension; if not, appeal to be relisted.