TC09596 - [2025] UKFTT 00895 (TC)

The provisions of VATA must be interpreted, as far as possible, so as to comply with the PVD.

Section 4 provides that:

“(1)

VAT shall be charged on any supply of goods or services made in the United Kingdom, where it is a taxable supply made by a taxable person in the course or furtherance of any business carried on by him.

(2)

A taxable supply is a supply of goods or services made in the United Kingdom other than an exempt supply.”

Section 5(2) provides, inter alia, that:

“(a)"supply" in this Act includes all forms of supply, but not anything done otherwise than for consideration;

(b)

anything which is not a supply of goods but is done for a consideration…is a supply of services.”

Section 24(1) defines “input tax” as, inter alia:

“VAT on the supply to [a taxable person] of any goods or services” which are “used or to be used” for a business “carried on by him.”

Section 25(2) entitles a taxable person to “deduct” “so much of his input tax as is allowable under” s 26 “from any output tax that is due from him”.

Section 26(1) and (2) provide that the amount of allowable input tax is that which is “attributable to” … “supplies … made or to be made by the taxable person in the course or furtherance of his business” - [including] taxable supplies.

The Assessments were raised under s 73(1), which provides that:

“73 Failure to make returns etc.

(1)

Where a person has failed to make any returns required under this Act (or under any provision repealed by this Act) or to keep any documents and afford the facilities necessary to verify such returns or where it appears to the Commissioners that such returns are incomplete or incorrect, they may assess the amount of VAT due from him to the best of their judgment and notify it to him.”

The “right of appeal” to the First-tier Tribunal (“FtT”) against an assessment is governed by s 83, which includes a list of matters in respect of which a right of appeal is available. The scope of the appeal right, as well as the jurisdiction of the FtT, differs between the various matters listed therein. An appeal against an assessment under s 73, or the amount of such an assessment, is brought under s 83(1)(p).

VATA and the Value Added Tax Regulations 1995 SI 1995/2518 (“the VAT Regulations”) are EU-derived domestic legislation, as defined by s 1B(7) of the European Union (Withdrawal) Act 2018 (“the Withdrawal Act”). Section 2 of the Withdrawal Act provides that EU-derived domestic legislation, as it had effect in domestic law immediately before IP-completion day (i.e., 31 December 2020), continues to have effect in domestic law on and after that day.