Key Facts
- •Waynefleet Limited appealed against a VAT assessment of £170,344.78.
- •HMRC denied the appellant's hardship application.
- •The appellant's principal business activities include journalism, writing, business and project management, marketing consultancy, and game shooting.
- •The VAT assessment related to the supply of pheasant shooting deemed a commercial activity.
- •The appellant argued that paying the VAT would render the business inoperable.
- •At the hearing, the appellant had minimal funds in its bank accounts.
- •The appellant provided recent accounts showing net liabilities and trading losses.
Legal Principles
Hardship in VAT appeals; balancing act between preventing abuse of appeals process and ensuring fair access to appeals.
HMRC v Elbrook (Cash & Carry) Limited [2017] UKUT 181 (TCC)
Hardship test is 'all or nothing'; ability to pay part of the sum is irrelevant.
HMRC v Elbrook (Cash & Carry) Limited [2017] UKUT 181 (TCC)
Test applied to appellant's position at the hearing date; future resources not considered.
HMRC v Elbrook (Cash & Carry) Limited [2017] UKUT 181 (TCC)
Existence of readily available resources does not negate hardship if using them would cause hardship.
HMRC v Elbrook (Cash & Carry) Limited [2017] UKUT 181 (TCC) and Seymour Limousines Limited v Revenue and Customs Commissioners [2009] UKVAT V20966
Burden of proof to establish hardship lies with the appellant.
HMRC v Elbrook (Cash & Carry) Limited [2017] UKUT 181 (TCC)
Outcomes
The Tribunal allowed the appellant's hardship application.
The appellant had no immediately or readily available resources to pay the VAT assessment; paying the VAT would cause hardship.