TC09603 - [2025] UKFTT 00931 (TC)

Fecha: 30-Jul-2025

What issues does the FTT have the jurisdiction to decide?

What issues does the FTT have the jurisdiction to decide?

The parties’ submissions

38.

Mr Way said that, since the Respondents had made no decision in relation whether the relevant supplies were exempt or taxable, the FTT had no jurisdiction to entertain an appeal against the decision under Section 83(1)(b) of the VATA – see Earlsferry at paragraphs [20] to [26].

39.

Similarly, Scandico demonstrated that the jurisdiction of the FTT under Section 83(1)(c) of the VATA was to consider only the issue in relation to which the Respondents had made a decision – namely, whether or not the Respondents’ refusal to exercise their discretion under Regulation 29(2) was reasonable. Where the Respondents had made no decision in relation to whether the supply in respect of which the deduction for VAT input tax was being claimed was exempt or taxable, Section 83(1)(c) of the VATA did not confer jurisdiction on the FTT to determine that question because:

(1)

a decision on that issue by the FTT in an appeal under Section 83(1)(c) of the VATA would affect third parties – namely, the supplier and the supplier’s other customers;

(2)

construing Section 83(1)(c) of the VATA in that way would amount to compelling the Respondents to decide that issue simply because the Appellant had made its appeal. The function of the FTT was to determine appeals against decisions that had actually been made by the Respondents. The FTT did not have the power to compel the Respondents to make a decision which might be the subject of an appeal – see Mather v The Commissioners for Her Majesty’s Revenue and Customs [2014] UKFTT 1062 (TC); and

(3)

Parliament could not have intended that an appeal could be made on the chargeability of a supply by the recipient of the supply simply because the issue could be subsumed into one of the other jurisdictional gateways in Section 83(1) of the VATA.

40.

Mr Way added that the Appellant’s remedy if it considered that the Respondents should have made that decision was a claim for judicial review. It was not a matter for the FTT.

41.

Mr Brown said that, even if the Respondents had not reached a decision in relation to whether the supplies were exempt or taxable:

(1)

the decision in Scandico applied only to appeals brought under Section 83(1)(c) of the VATA and had no effect on appeals brought under Section 83(1)(b) of the VATA; and

(2)

the decision by the Respondents in this case did not fall solely within the second category mentioned in Scandico – namely, the reasonableness of the Respondents’ refusal to exercise their discretion under Regulation 29(2) – but extended also to the additional issue of whether VAT had been charged. That decision was clearly not part of the exercise of the Respondents’ discretion under Regulation 29(2) but related to the question of whether VAT input tax had been incurred by the Appellant. In determining whether that decision was right or wrong, the FTT was necessarily entitled and obliged to consider whether the supplies in question were exempt or taxable because the payments made by the Appellant to the Suppliers had been expressed to be VAT–inclusive.