UT-2024-000123 - [2025] UKUT 00360 (TCC)

We accept the submission that Mather at [19] was correct in that a refusal to process a repayment claim was, in effect, a rejection of that claim. In relation to the Contents Dispute HMRC refused to process the Company’s claims for repayment stating “your claim for £2,177,925.16 will be withheld from payment until the underlying liability query has been resolved.” In our view, the continued refusal to pay the Company’s claims constituted a rejection of those claims and, accordingly, constituted a determination by the Commissioners of amounts of VAT payable for the purposes of section 84(3).

We were not taken through, in any detail, the voluminous correspondence between HMRC and the Company and its advisers in relation to the main four issues in dispute, summarised above under the heading “Factual Background”. Nonetheless, as Mr Beal submitted, claims for repayment and appeals against assessments will necessarily involve determination of the underlying liability to tax. To say that HMRC has not determined an amount of VAT payable, against that background, seems to us unrealistic. HMRC appears to have indicated that the various supplies should be or should have been standard rated and that each appeal or reclaim of overpaid VAT effectively addressed HMRC’s position.

Therefore, if we had been required to decide HMRC’s Ground 2 we would have decided in favour of the Company.

Accordingly, had it been necessary to do so, we would have dismissed HMRC’s appeal on Ground 2.