MG Rover Group Ltd v Revenue & Customs & Ors [2014] UKFTT 327 (TC) (31 March 2014)

MG Rover Group Ltd v Revenue & Customs & Ors [2014] UKFTT 327 (TC) (31 March 2014)

Under UK law, the right to claim repayment of overpaid VAT under section 80 VATA rests with the company that made the sales and bore the economic burden (the 'real world supplier'), but only after it ceases to be grouped with the representative member. While the group relationship subsists, the representative member is the person entitled to claim. Once the real world supplier leaves the group, the deeming effect of section 43 ends, and the right to claim repayment reverts to the real world supplier. The current representative member is not entitled to claim repayment for periods when the real world supplier was a group member but has since left. Assignments of claims are only effective...

Citation
[2014] UKFTT 327
Parties
Appellant: MG Rover Group Limited; First Respondent: The Commissioners for Her Majesty’s Revenue & Customs; Second Respondent: BMW (UK) Holdings Limited; Third Respondent: Rover Company Limited
Jurisdiction
United Kingdom
Judgment Date
31 March 2014
Procedural Posture
VAT Group Registration/overpaid Output Tax Claim / Preliminary Issue Determination Before First Tier Tribunal (tax)
Outcome
Preliminary issue determined in favour of the appellant (MGR).
Legal Topics
VAT Group Registration, Overpaid Output Tax, Section 80 VATA, Section 43 VATA, Assignment of Claims, Statutory Interpretation, EU VAT Directive
Tax Law European Union Law VAT Group Registration Overpaid Output Tax Section 80 VATA Section 43 VATA Assignment of Claims Statutory Interpretation +1 more

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Parties

MG Rover Group Limited

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

First Respondent

BMW (UK) Holdings Limited

Second Respondent

Rover Company Limited

Third Respondent

Procedural Posture

VAT Group Registration/overpaid Output Tax Claim / Preliminary Issue Determination Before First Tier Tribunal (tax)

Legal Issues

  1. 1 Whether, under UK law, the right to claim repayment of overpaid VAT rests with the company that made the sales (the 'real world supplier') or with the representative member for the time being of the VAT group;
  2. 2 Whether the answer changes if the real world supplier funded the VAT or made the supplies;
  3. 3 Whether an assignment between group members can transfer the right to claim repayment under section 80 VATA.

Ratio Decidendi

Under UK law, the right to claim repayment of overpaid VAT under section 80 VATA rests with the company that made the sales and bore the economic burden (the 'real world supplier'), but only after it ceases to be grouped with the representative member. While the group relationship subsists, the representative member is the person entitled to claim. Once the real world supplier leaves the group, the deeming effect of section 43 ends, and the right to claim repayment reverts to the real world supplier. The current representative member is not entitled to claim repayment for periods when the real world supplier was a group member but has since left. Assignments of claims are only effective...

Court Disposition

Preliminary issue determined in favour of the appellant (MGR).

Orders

  • It is declared that, under UK law, the right to claim repayment of overpaid VAT for periods when the real world supplier has left the VAT group rests with that supplier and not with the current representative member.