Key Facts
- •Bollinway Properties Limited (Bollinway) claimed a VAT repayment supplement of £3,554,240.82 under section 79 of the VAT Act 1994 (VATA).
- •The claim related to a £71,084,816.43 VAT credit resulting from the purchase of a property portfolio from Toys “R” Us Properties Limited (TRUP).
- •HMRC offset the VAT credit against TRUP's VAT liability instead of paying Bollinway directly.
- •The dispute centered on whether HMRC's inquiries were conducted within the 30-day 'relevant period' stipulated in section 79 VATA, thus precluding the repayment supplement.
- •HMRC's inquiries involved requests for various documents, including ultimately the TR1s (property transfer documents).
Legal Principles
Section 79 VATA provides for a repayment supplement if a VAT credit is due and a written instruction for payment isn't issued within 30 days, excluding periods for reasonable inquiries.
VAT Act 1994, Section 79
Regulations 198 and 199 of the VAT Regulations 1995 clarify the computation of the 30-day period, excluding time spent on reasonable inquiries.
VAT Regulations 1995, Regulations 198 and 199
The reasonableness of HMRC's inquiries is determined on a fact-specific basis, considering the size and complexity of the transaction and the need to verify the VAT credit claim.
Customs and Excise Commissioners v L Rowland & Co (Retail) Ltd [1992] STC 647 and case law discussed in sections 67-78
Appellate courts should not lightly interfere with factual findings of a first-instance tribunal unless the decision was one that no reasonable judge could have reached.
Instagram, LLC v Meta 404 Limited [2023] EWHC 436 (Ch)
Outcomes
The Upper Tribunal dismissed Bollinway's appeal.
The Upper Tribunal upheld the First-tier Tribunal's finding that HMRC's request for a 'full set of backing documents,' including the TR1s, was reasonable given the circumstances. The time taken to obtain these documents was therefore legitimately excluded from the 30-day period, meaning the instruction for payment was issued within the relevant timeframe.