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

Mr Brown submitted that the FTT should have decided that the Appellant could rely on invoices, whether or not they had been provided to HMRC prior to them issuing assessments. This was because the legal test is whether the Appellant held the invoices at the time it filed its VAT returns in which the input tax deduction was exercised, not whether they had been provided to HMRC. The FTT’s jurisdiction was therefore appellate and not supervisory.

Mr Brown contended that the FTT was wrong to conclude at [46]-[47] of the Decision that the UT decisions in Scandico and Boyce “set out the approach to be followed in appeals of this kind”. In both, it had been accepted by both parties that the taxpayer did not hold valid VAT invoices at the time of making the claim, so the issue in dispute was about alternative evidence and the exercise of HMRC’s discretion. Here, the Appellant did hold valid VAT invoices. Mr Brown referred to HMRC v Aimia Coalition Loyalty UK Ltd [2013] UKSC 42 at [68], where Lord Reid stated:

“It is also important to bear in mind that decisions about the application of the VAT system are highly dependent upon the factual situations involved. A small modification of the facts can render the legal solution in one case inapplicable to another.”

In his submission, the fact that the Appellant held valid VAT invoices at the time it submitted its VAT return meant that there was significantly more than “a small modification of the facts” as between the Appellant’s case and that of the appellants in Boyce and Scandico.