Regency Factors Ltd v Revenue & Customs (VAT - ADMINISTRATION : Bad debt relief) [2019] UKFTT 144 (TC) (28 February 2019)

Regency Factors Ltd v Revenue & Customs (VAT - ADMINISTRATION : Bad debt relief) [2019] UKFTT 144 (TC) (28 February 2019)

Factoring charges were contractually due and payable at the time of assignment of debts and satisfied by deduction from advances to clients, amounting to receipt of consideration. No claim for bad debt relief can be made as charges were paid within six months of supply.

Citation
[2019] UKFTT 144 (TC)
Parties
Appellant: Regency Factors Ltd; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
28 February 2019
Procedural Posture
VAT Bad Debt Relief Appeal / Final Judgment at First Tier Tribunal (tax)
Outcome
Appeal dismissed
Legal Topics
Bad Debt Relief, Factoring Services, VAT Administration
Tax Law VAT Bad Debt Relief Factoring Services VAT Administration

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Parties

Regency Factors Ltd

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

VAT Bad Debt Relief Appeal / Final Judgment at First Tier Tribunal (tax)

Legal Issues

  1. 1 Whether consideration for supply of factoring services was received at the time of initial advance
  2. 2 Whether amounts outstanding 6 months after time of supply
  3. 3 Whether claims for bad debt relief were made in time

Ratio Decidendi

Factoring charges were contractually due and payable at the time of assignment of debts and satisfied by deduction from advances to clients, amounting to receipt of consideration. No claim for bad debt relief can be made as charges were paid within six months of supply.

Court Disposition

Appeal dismissed

Orders

  • VAT assessments withdrawing bad debt relief are upheld
  • No bad debt relief is available for factoring charges