Sheilds & Sons Partnership v Revenue & Customs [2014] UKFTT 944 (TC) (08 October 2014)

Sheilds & Sons Partnership v Revenue & Customs [2014] UKFTT 944 (TC) (08 October 2014)

The tribunal held that Regulation 206(1)(i) of the VAT Regulations 1995, allowing cancellation of a flat-rate certificate for protection of the revenue, is compatible with the EU Directive. The Directive does not specify the circumstances for termination of participation in the scheme, leaving this to national law. The appellant’s over-recovery of flat-rate VAT compared to input tax justified cancellation to preserve fiscal neutrality. The appellant is within a category of farmers whose continued participation is inappropriate due to excess recovery, and the national provision is not incompatible with the Directive.

Citation
[2014] UKFTT 944
Parties
Appellant: Shields & Sons Partnership; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
08 October 2014
Procedural Posture
VAT Appeal / First Tier Tribunal (tax Chamber) Decision
Outcome
Appeal dismissed
Legal Topics
VAT, Agricultural Flat Rate Scheme, EU Directives, Fiscal Neutrality, Administrative Law
Tax Law European Union Law VAT Agricultural Flat Rate Scheme EU Directives Fiscal Neutrality Administrative Law

Case Brief

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Parties

Shields & Sons Partnership

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

VAT Appeal / First Tier Tribunal (tax Chamber) Decision

Legal Issues

  1. 1 Whether HMRC lawfully cancelled the appellant’s certificate to use the Agricultural Flat-rate Scheme on grounds of protection of the revenue
  2. 2 Whether UK domestic legislation and its application are compatible with the relevant EU Directive (Council Directive 2006/112/EC)

Ratio Decidendi

The tribunal held that Regulation 206(1)(i) of the VAT Regulations 1995, allowing cancellation of a flat-rate certificate for protection of the revenue, is compatible with the EU Directive. The Directive does not specify the circumstances for termination of participation in the scheme, leaving this to national law. The appellant’s over-recovery of flat-rate VAT compared to input tax justified cancellation to preserve fiscal neutrality. The appellant is within a category of farmers whose continued participation is inappropriate due to excess recovery, and the national provision is not incompatible with the Directive.

Court Disposition

Appeal dismissed