![TC09603 - [2025] UKFTT 00931 (TC)](https://backend.juristeca.com/files/emisores/logo_7HSuEAV.png){kind=logo}
case management history
case management history
The appeal has had a long, and somewhat complicated, case management history. For present purposes, it suffices to note the following:
on 28 March 2024, the Respondents applied for the FTT to strike out the appeal under Rule 8(2) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (the “Tribunal Rules”) on the basis that the FTT did not have jurisdiction to determine the appeal or under Rule 8(3)(c) of the Tribunal Rules on the basis that the appeal had no reasonable prospect of success;
following objections to that application lodged by the Appellant with the FTT on 29 April 2024, and the Respondents’ reply to those objections lodged with the FTT on 16 May 2024, a video hearing was held before Judge Amanda Brown on 16 September 2024. Prior to the hearing:
the Respondents withdrew their application for the appeal to be struck out under Rule 8(2) of the Tribunal Rules; and
the Appellant conceded that the application under Rule 8(3)(c) of the Tribunal Rules was appropriate to the extent that the appeal related to the period 1 November 2011 to 31 March 2018.
At the hearing, Judge Brown indicated that, from her review of the papers, the facts in the present case were distinguishable from those in Zipvit because the payments made by the Appellant to the Suppliers had been made on a VAT–inclusive basis. As such, the Appellant had at least an arguable case as regards the Second Period, the Third Period and the rest of the First Period. The Respondents accordingly accepted her invitation to withdraw their application under Rule 8(3)(c) of the Tribunal Rules as regards those periods and she directed the Respondents to serve their statement of case (the “SOC”) by no later than 18 November 2024;
on 18 November 2024, the Respondents served the SOC. The SOC included the following submissions on the part of the Respondents:
the supplies to the Appellant had been exempt from VAT (paragraphs [29] and [39]);
the Appellant had made no argument in its grounds of appeal that the supply to the Appellant was in fact a taxable supply and therefore the issue of whether the supply was in fact a taxable supply did not fall to be considered on the appeal (paragraphs [29] and [38]);
a term in the contract between the Appellant and the Suppliers to the effect that the contract price was inclusive of all and any relevant statutory charges and taxes did not have the effect of deeming that the contract price was inclusive of an element in respect of VAT (paragraphs [35] and [40]). (I should note at this point that, at the hearing before me, Mr Way indicated that, although the Respondents would wish to maintain this position in any hearing of the substantive appeal, I should assume for the purposes of dealing with the present application that the Respondents accepted that the payments made by the Appellant to the Suppliers were inclusive of any VAT which might arise in respect of the supplies in question); and
even if the Appellant did make payments to the Suppliers for which it had the right to deduct VAT input tax, the Appellant’s claim for a repayment of those sums had been reasonably refused pursuant to Regulation 29(2) of the Value Added Tax Regulations 1995 (SI 1995/2518) (“Regulation 29(2)”) because the Appellant had not provided appropriate documentary evidence to support its claim (paragraphs [42] and following);
following the service of the SOC, a dispute arose between the parties as to whether the Appellant in its grounds of appeal had clearly stated that, in its view, the supplies in question were taxable or whether, as averred by the Respondents in paragraph [29] of the SOC, it had not. On 27 November 2024, Judge Brown held that, in her view, the first ground of appeal did include such a statement and she therefore directed the Respondents to provide further and better particulars of the basis “on which, if they do, they contend that the supplies by the [Suppliers] to the Appellant are exempt from VAT (or in any event not taxable) thereby addressing the first sentence of ground 1 of the Appellant’s grounds of appeal”;
on 14 January 2025, the Respondents served their further and better particulars. In that document, the Respondents stated that their position was that “no decision has been made concerning the chargeability of the supply and no appeal lies in relation to the chargeability of the supply. It does not therefore form part of the issues to be determined in this appeal.”
The Respondents submitted that their decision at each stage had been limited to the question of whether the Appellant’s claim for the repayment of VAT input tax should be allowed and that they had not at any stage made a decision about whether the supplies in question were or were not exempt from VAT. Instead, the Appellant’s claim had been refused on the basis that both parties to each supply had accepted that the relevant supply was exempt, no VAT had been charged and no VAT invoices had been raised, with the result that Zipvit applied. The chargeability of the supplies was therefore not an issue which fell to be determined in the appeal;
on 21 January 2025, the Appellant applied to the FTT for a direction precluding the Respondents from defending their rejection of the Appellant’s claims on the basis that the supplies made to the Appellant by the Suppliers were anything other than standard–rated;
on 31 January 2025, the Respondents served their response to the Appellant’s application in which they:
submitted that the FTT had no jurisdiction to consider an appeal on the issue of whether the supplies were exempt or standard–rated or to direct the Respondents to make a decision on that issue;
applied to amend the SOC by deleting paragraph [29] in its entirety on the basis that that paragraph had been based on a misunderstanding of the Appellant’s grounds of appeal;
applied for the appeal to be struck out under Rule 8(3)(c) of the Tribunal Rules on the basis that:
the question of whether they had acted reasonably in denying the repayment of the VAT input tax was premised on the substantive chargeability of the supplies in question;
as they had made no decision on the substantive chargeability of those supplies, the question fell outside the FTT’s jurisdiction; and
therefore the appeal had no reasonable prospect of success; and
submitted that, following the amendment of the SOC, the issue of whether the supplies were exempt or standard–rated was irrelevant;
on 17 February 2025, Judge Brown:
stayed the Appellant’s application that the Respondents be precluded from defending their rejection of the Appellant’s claims on the basis that the supplies made to the Appellant by the Suppliers were anything other than standard–rated;
refused the Respondents’ application for the appeal to be struck out; and
refused the Respondents’ application to amend the SOC;
on 11 April 2025, the Respondents applied for permission to appeal against Judge Brown’s decision of 17 February 2025 on the basis that:
pursuant to the Upper Tribunal (the “UT”) decision in Scandico Limited v The Commissioners for Her Majesty’s Revenue and Customs [2017] UKUT 0467 (TCC) (“Scandico”), Section 83(1)(c) of the Value Added Tax Act 1994 (the “VATA”) did not permit the FTT to determine whether VAT was chargeable on the supplies to the Appellant where the Respondents had made no decision on that issue; and
given that that was the case, the FTT had erred in refusing to strike out the appeal because, on a true construction of Section 83(1)(c) of the VATA, the appeal had no reasonable prospect of success;
on 30 April 2025, Judge Brown determined that, in the light of the reference to Scandico in the Respondents’ application for permission to appeal against her decision of 17 February 2025, a case to which she had not previously been referred by the parties, she had reviewed that decision and concluded that it should be set aside and re–made. To that end, she attached a draft of her re–made decision which took into account the judgment in Scandico and invited both parties to make representations on the draft before she issued her final re–made decision which would take account of those representations;
on 7 May 2025, the Appellant indicated that it was in agreement with Judge Brown’s draft re–made decision and had no representations to make as regards Judge Brown’s proposed course of action;
on 14 May 2025, the Respondents issued their representations in response to Judge Brown’s proposal of 30 April 2025, objecting both to the procedure which Judge Brown had adopted in reviewing and re–making her decision and to the terms of the draft re–made decision and asking for the decision to be re–made only after an oral hearing at which the parties could make submissions;
on 6 June 2025, Judge Brown directed that, whilst she did not accept that the procedure she had adopted in re–making the decision was flawed, she had concluded that it was in the interests of justice that the decision should be re–made only after an oral hearing and she asked for submissions from both parties as to whether the hearing should be before her or a different judge;
on 13 June 2025, the Appellant asked that the hearing be before Judge Brown and applied for a direction that its application of 21 January 2025 for a direction precluding the Respondents from defending their rejection of the Appellant’s claims on the basis that the supplies made to the Appellant by the Suppliers were anything other than standard–rated, which had been stayed by Judge Brown on 17 February 2025, be heard at the same time;
also on 13 June 2025, the Respondents requested that the hearing be before a different judge on the grounds that, although they did not consider that Judge Brown had any actual bias in relation to the matter in question, the hypothetical objective observer might consider that she was biased; and
on 20 June 2025, Judge Brown determined that the hearing should be before a different judge.
- Heading
- The hearing took place on 30 July 2025. I heard Mr Tim Brown of counsel for the Appellant and Mr Sam Way of counsel for the Respondents. With the consent of the parties, the form of the hearing was a
- the background to the appeal
- case management history
- the issue at the hearing
- the law
- Relevant case law on the application of Rule 8(3)(c) of the Tribunal Rules
- Although the summary in Fairford Group Plc is very helpful, we prefer to apply the more detailed statement of principles in respect of application for summary judgment set out by Lewison J, as he then
- In reaching its conclusion the court must not conduct a 'mini-trial': Swain v Hillman This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it
- However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably
- Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissibl
- On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessa
- Other relevant case law
- discussion
- What did the Respondents decide?
- The parties’ submissions
- Conclusion
- What issues does the FTT have the jurisdiction to decide?
- Conclusions