UT (Tax & Chancery) UT/2023/00099 - [2025] UKUT 00013 (TCC)

Aspire wrote to HMRC on 8 February 2019 saying:

“I can confirm that the records which you have requested are available. However, in view of the interest shown by HMRC into businesses under the common directorship of Mr Clarke, I would respectfully request that we arrange a suitable date and time when all the records relating to the above-named companies can be produced and reviewed.”

Officer Mills replied on 14 February 2019 as follows:

“I note the suggestion of a visit to see the records at the premises.

As you are aware I initially enquired regarding a combined visit and the records in October. As such I would not wish to delay the production of the records any further. In the case of FS Commercial you will be aware assessments have been raised.

On any assessments issued, I would be happy to look at the evidence again should it be produced within the normal assessment time limits.”

The Appellant challenged the assessments by way of an email to HMRC dated 2 March 2019, attaching the following grounds of appeal:

“The Assessment is overstated because the Appellant is entitled to claim a deduction for the input tax associated with its transactions in accordance with Section 24 - 26 of the VAT Act 1994. Accordingly, the Assessment plus interest accrued should be set aside. The Appellant's transactions for which input tax has been claimed are predominantly in relation to supplies of labour services from its UK suppliers and so, an input tax deduction is applicable in these circumstances as B2B services are being supplied for consideration. HMRC's grounds for making the assessment is based on its contention that no evidence of input tax deducted and payment has been provided to support the claim.

Schedule 11 of the VAT Act 1994 sets out the requirement to keep records, and to make those records available on request to an officer of HMRC.

The Appellant has made these records available.

Paragraph 6, Schedule 36 of Finance Act 2008 requires the Appellant to produce information at a place agreed by the Appellant and HMRC.

The Appellant has attempted to reach an agreement to produce the records on a reasonable basis by making them available at the Principle [sic] Place of Business.

Additional Information

…

The case officer was invited to attend the Principle [sic] Place of Business on 13th February 2019 to inspect the business records. This meeting date was declined, and the Case Officer demanded that the records be sent to him directly.

This request is wholly unreasonable, unrealistic and unjustified as the business records run into many hundreds of thousands of transactions and would have taken a significant amount of time to produce. It is also doubtful if HMRC's Drop-box facility would have been able to cope with such a large volume of records.

The Appellant is willing to produce its records albeit on a reasonably required basis having regard to the objective of HMRC's enquiry which is to check the validity of the VAT re-claim.

On 8th February the Case Officer was offered alternative dates for a meeting during the week commencing 20th March 2019 at which time the records would be produced for inspection at the Principle [sic] Place of Business.

On the same date, the VAT assessments were received by the Appellant (dated 6th February 2019) to which this appeal relates.”