TC09568 - [2025] UKFTT 00917 (TC)

By refusing to provide ICL with a “document authenticated or issued by the proper officer” and thereby denying it the evidence required by regulation 29(2)(1)(c), HMRC have acted perversely and in breach of EU law. Neither VATA nor the 1995 Regulations specify the document that HMRC can issue or authenticate for the purposes of regulation 29(1)(c). It could be a C79 or any equivalent document. ICL’s challenge does not depend upon the specifics of the C79 procedure.

It is well-established that the Tribunal has a specific supervisory jurisdiction, under section 83(1)(c) VATA, in respect of HMRC’s exercise of discretion under regulation 29, as explained by the Upper Tribunal in Noor [2013] UKUT 071 (TCC) at [87]. In the case of an appeal under section 83(1)(c) VATA, that jurisdiction extends to a challenge to the exercise of discretion “which the legislation clearly confers on HMRC”; it is clear that the Tribunal has a supervisory jurisdiction in cases where HMRC has refused to allow a taxpayer to recover input tax where it does not hold a VAT invoice but holds other evidence of input tax.

The correct interpretation of Noor, and whether/how it could be reconciled with another decision (Oxfam v HMRC, [2010] STC 686), was considered by the FtT in Rotberg v HMRC, [2014] UKFTT 657 (TC).

“103.

We are bound to say that we do not consider Oxfam and Noor to be irreconcilable. In our view the different approaches adopted can be explained by the different substantive issues before the High Court in Oxfam and the Upper Tribunal in Noor . In Oxfam , the issue before the VAT Tribunal concerned the attribution of what was clearly input tax to taxable supplies on the one hand and exempt or non-business supplies on the other. The effect of the claim to a legitimate expectation was therefore to alter that apportionment. In Noor, as the Upper Tribunal emphasised, the claim was for something that was neither input tax, nor something that could be treated, under the legislation, as input tax.”

A similar analysis can be seen in the recent FtT decision in Chelsea Cloisters Management Ltd v HMRC, [2025] UKFTT 205 (TC) at [65]. Clearly, the Tribunal can review how HMRC exercise their powers in relation to input tax. Here, they have refused to authenticate a C79 because ICL did not quote a UK EORI number on the customs declaration and did not amend the customs declaration within the required 3 years.

HMRC rely on the fact that the Tribunal does not have jurisdiction to mandate HMRC to issue a C79 certificate and claim that this serves to underline that this is a “public law argument” [24]. However, the inability of the Tribunal to mandate a particular remedy is true of its supervisory jurisdiction generally; GB Housley Ltd v HMRC, [2016] EWCA Civ 1299 at [69].

HMRC’s strike-out application is premised on the argument that HMRC’s decision whether to authenticate or issue a document required by the taxpayer to satisfy regulation 29(2)(1)(c) “is not part of the regulation 29 discretion”, but this plainly is a discretion conferred on HMRC by the VAT legislation and it plainly is explicitly part of regulation 29, which refers to a document being issued or authenticated “by the proper officer” and does not circumscribe how that power is exercised. HMRC’s discretion to authenticate or issue the document which is required to claim input tax entitlement under regulation 29(1)(c) is, very plainly, “a discretion, given to HMRC under primary or subordinate VAT legislation relating to the entitlement to input tax credit” to use the terminology of Noor at [87].

It is artificial to say that HMRC had not made a decision refusing to issue/authenticate the required document. Even if it is a purely administrative process, HMRC set that process up and decided how it should be operated by its officers.

HMRC decided that a C79 needed to be held as evidence of VAT paid on import, a UK EORI number needed to be quoted on the import declaration before a C79 would be issued and a customs declaration could only be amended (here to include a UK EORI number) within three years of the importation. No UK or EU provisions require HMRC to adopt this position, but this is what led to the review decision that ICL “had not claimed that amount and are out of time to make any claim for that import VAT or to amend the import entry”.

Even if one were to accept HMRC’s hypothesis, HMRC’s decision refusing to issue or authenticate the document required by regulation 29(2)(1)(c) would then necessAprily be a “prior decision” to the Decision refusing the input tax claim. The Decision was made on the clear basis that ICL does not have the evidence required by regulation 29(2)(1)(c). The only reason that ICL does not have that evidence is because HMRC have refused to issue or authenticate the required document. As such, the Tribunal would have jurisdiction in any event pursuant to section 84(10) VATA, which allows the Tribunal to consider the reasonableness of a “prior decision” upon which the appealed decision depends and where the exercise of discretion in the “prior decision” falls outside one of the appeal “gateways” in section 83(1).