Silicon Graphics Finance SA v HM Revenue & Customs [2006] EWHC 1889 (Admin)

Case No CO/3721/2005[2006] EWHC 1889 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate Friday 21st July 2006
Before
THE HONOURABLE MR JUSTICE SILBER
Between
SILICON GRAPHICS FINANCE SA, (formerly SILICON GRAPHICS MANUFACTURING SA)ClaimantsHER MAJESTY’S REVENUE AND CUSTOMSDefendants
(Transcript of the Handed Down Judgment ofSmith Bernal WordWave Limited190 Fleet Street, London EC4A 2AGTel No: 020 7421 4040 Fax No: 020 7831 8838Official Shorthand Writers to the Court)
Philippa Whipple (instructed by Forbes Hall) for ClaimantsPeter Mantle (instructed by The Solicitor for Her Majesty’s Revenue and Customs) for the Defendants
JudgmentThe Honourable Mr. Justice Silber:I. Introduction
[1]Silicon Graphics Finance SA (“the claimants”) are seeking to quash a decision of Her Majesty’s Revenue and Customs (“HMRC”), who are the successors of Her Majesty’s Commissioners for Customs and Excise, by which it refused to repay to the claimants the sum of £317,789.93, which the claimants contend was over-declared Value Added Tax (“VAT”) for the period 12/99, which was the last three months of 1999. Permission to apply for judicial review was granted by Richards J as he then was.[2]The claim for repayment, which is the subject-matter of the present application, is now time-barred unless the three-year time limit for bringing claims for repayment is disapplied in their case. The case for the claimants is that this time limit can be disapplied because they can rely on an exception to the three year time limit, which is set out in a concession (“ the Concession”) published by the HMRC’S predecessors on 27th March 1997. It was subsequently withdrawn with effect from 1st July 2005. The Concession was announced as part of a package of extra-statutory measures to accompany the introduction into UK law of the “three year cap” on claims for refunds for overpaid tax.[3]The Concession stated (with my emphasis added to show the words relevant to this application) that:
“d. Claims or adjustments which cover tax appearing on both sides of a VAT return and therefore cancel each other out (such as those in respect of acquisition tax or the reverse charge), correction of tax point errors and simple duplications of output tax”
. II. The Legal Background and the Issue on this Application.[4]There is agreement on the legal principles applicable in this case. In R v CIR ex p MFK Underwriting Agencies Ltd and Others62 TC 607, Bingham LJ (as he then was) explained at page 643 that: “No doubt a statement formally published by the Inland Revenue to the world might safely be regarded as binding, subject to its terms, in any case falling clearly within them”.[5]Lightman J followed this approach when considering the applicability of the Concession in R (on the application of British Telecommunications plc) v HMRC [2005] STC 1148 (“the BT case”) when he concluded that it was “well established” that a concession is available to those who fall clearly within its terms. Counsel are agreed that the sole issue on this application is whether the claimants’ claim falls within the Concession and to succeed on this application, the claimants must show that their claim falls within the terms of the Concession.[6]Mrs. Whipple for the claimants contends that the overpayment by the claimants was a “simple duplication of output tax” but that is not accepted by Mr Mantle counsel for the HRMC, who contends that the claim falls outside the terms of the Concession. As I will explain, it is common ground that two separate and significant errors were made in the returns of the claimants for 12/99 and it will be necessary to analyse each of them. III. The Concession.[7]The HMRC have not published any guidance on the meaning of the Concession and it seems that the Concession has only been judicially considered on one previous occasion and that was in the BTcase in which Lightman J explained that:
“21. The Concession applies if the overpayment was a “simple duplication of output tax”
. To constitute a “simple duplication of output tax” there must be: (1) duplication; (2) of output tax; and (3) the duplication must be simple. 22. The term “duplication” means doubling up of payment. The term “output tax” means the tax payable on a taxable supply of goods and services. There have been two suggestions to me as to the possible meaning of the term “simple” in this context. It may mean “only duplication and nothing else” and it may mean “uncomplicated”. In the context of the Concession plainly the former meaning is preferable and applicable. The Concession only bites if the overpayment is a duplication (or doubling up) of payment of output tax and the Concession cannot possibly be intended to require examination and evaluation of the degree of complication of any exercise to be undertaken”. IV. The Claimants and their VAT Returns for 12/99.[8]As I have mentioned, two separate errors were inadvertently made in connection with the claimants’ VAT returns for the period in question. The first error (which I will call “the transposition error”) was that returns had to be submitted by the claimants not only for themselves but also for their agent in the United Kingdom, which was Silicon Graphics Ltd (“the United Kingdom company”) but the figures for each company for the period with which this application is concerned were inserted on the wrong VAT return so that the figures which were supposed to relate to the claimant were inserted on the VAT return of the United Kingdom company and vice-versa.[9]The second error (which I will call “the bookkeeping error”) related to the calculation of the VAT payable by the claimants, who were at the material time a manufacturer of computer hardware which it sold in the Community through a pan-European Commissionaire structure, referred to in the United Kingdom as an “undisclosed agency”. Both the claimants and the United Kingdom company were part of the SGI group of companies but they were separate entities formed under the laws of different companies.[10]By section 47(2A) of the VAT Act 1994, where goods are supplied through an agent who acts in his own name, the supply “shall be treated as both a supply to the agent and a supply by the agent”.[11]In 1999, the Commissioners required agents acting in their own name to follow a specific invoicing procedure, set out at paragraph 10.7 of Notice 700, which was that:(i) the agent (in this case, the United Kingdom company) was obliged to issue an invoice to the end customer showing the value of the goods sold;(ii) the principal (in this case, the claimants) was obliged to issue an invoice to the agent showing the same value for the goods sold; and(iii) the agent (in this case, the United Kingdom company) was then required to issue a separate invoice to the principal for its commission which was due in return for the provision of agency services.[12]For obvious reasons, the invoices due at stages (i) and (ii) were often referred to as “back- to-back invoices” as they were required to be issued for the same value and in the same VAT accounting period as each other.[13]In 1999 and up to July 2001 when the claimants changed its method of accounting for VAT in line with the Commissioners’ revised requirements, the claimants were registered for VAT in the United Kingdom. They were required to comply with the procedures, including back-to-back invoices for the goods and invoicing for agency services, outlined in paragraph 11 above.[14]However, accounting system restraints within the SGI group meant that local subsidiaries were unable to issue inter-company invoices. It was, therefore, not possible for the United Kingdom company to issue an invoice to the claimants reflecting the agency services, although it was possible for the claimants to issue a credit note to the United Kingdom company. Therefore, these two companies devised a procedure to ensure that both companies accounted for VAT in accordance with UK requirements.[15]This procedure involved three steps, which were: i) Step 1: to enter a credit note on the system equal to the value of the Commission paid by the claimants to the United Kingdom company. This credit note was issued by the claimants (the only company of the two able to issue inter-company invoices) to the United Kingdom company. This had the effect of creating a negative entry in the claimants’ output tax column and in the United Kingdom Company’s input tax column, so that the net values shown were correct, and it ensured compliance with United Kingdom procedures by which the agency commission had to be evidenced by an invoice. However, the input and output figures, if left there, were incorrect. So the next two steps were required. ii) Step 2: to reverse out the credit note by putting a positive entry in the claimants’ output tax column and a positive entry in the United Kingdom company’s input tax column, equal to the amounts of commission and VAT thereon shown on the credit note. This was a manual adjustment. It had the effect of “neutralising” the credit note, but it meant that the claimants’ VAT account took no account of the payment of agent’s commission and VAT on it. iii) Step 3: to insert equal and opposite positive entries in the claimants’ input tax column and in the United Kingdom company’s output tax column, to reflect the reality of the supplies of agency services by the United Kingdom company to the claimants. This was another manual adjustment, which meant that the VAT account was correct in showing not only the correct amount of output tax due overall, but it also correctly reported the input tax and output tax for each entity account. The system was well explained in the claimants’ witness statements by a diagram, which is Table 1 below and which sets out the steps which it was intended would occur. TABLE 1 - VAT accounting for the claimants and the United Kingdom Company as it should have been carried out 16. VAT Returns The claimants The United Kingdom Company Input Tax Output Tax Input Tax Output Tax Transaction 1: Invoice issued by undisclosed agent (the United Kingdom Company) to customer for £100 plus 17.50 VAT 17.50 Transaction 2: Invoice issued by the claimants to the United Kingdom Company for £100 plus 17.50 VAT 17.50 17.50 Transaction 3: Invoice issued by the United Kingdom Company to the claimants for agency services for £10 plus 1.75 VAT 1.75 1.75 Total 1.75 17.50 17.50 19.25 Net VAT Liability 15.75 1.75[16]When it came to preparing the returns for December 1999, the official charged with producing the VAT returns for the claimants and the United Kingdom company inadvertently made an unfortunate and significant error as she did not complete step 1 but she nevertheless went on to finish steps 2 and 3. This meant that the claimants accounted for more output tax than it ought to have done because the VAT on the credit note which ought to have been included on the VAT account at step 1 was in error omitted. The error can be shown by Table 2 with the error shown in italics below. 18. TABLE 2 – Illustration of the error in the December 1999 VAT workings for the claimants. VAT Returns The claimants The United Kingdom Company Input Tax Output Tax Input Tax Output Tax Transaction 1: Invoice issued by undisclosed agent (the United Kingdom Company) to customer for £100 plus 17.50 VAT 17.50 Transaction 2: Invoice issued by the claimants to the United Kingdom Company for £100 plus 17.50 VAT 17.50 17.50 Transaction 3: Credit note issued by the claimants to the United Kingdom Company for agency services for £10 and 1.75. This credit should form part of the VAT accounting report for the period. (Step 1) VAT omitted in error from report (1.75) First Manual Adjustment Reversal of credit note (Step 2) 1.75 1.75 Second manual adjustment : Transferring credit note liability between output tax and input tax (Step 3) 1.75 1.75 Total 1.75 19.25 17.50 19.25 Net VAT liability 17.5 1.75[18]It was this failure to enter the credit note into the system, which caused one of the problems in the 12/99 VAT Return. In the working papers relating to the VAT calculations, the first entry is Great Britain Standard rated, in other words United Kingdom VAT at the standard rate (17.5%), in the sum of £1,640,435.30.There is also in the entry in those working papers a positive entry of £319,798.93, showing the VAT on the commission payments for that quarter. However, the £319,798.93 is included in the £1,640,435.30, because of the earlier failure to perform step 1 and to post the credit note.[19]So the bookkeeping error would have led to an error in the calculation of the claimant’s output tax if but only if this error had led to the wrong figure being inserted on the claimant’s VAT return. The bookkeeping error was followed by the transposition error which meant first that the bookkeeping error led to the error on the United Kingdom company’s VAT return and second that the bookkeeping error did not lead to the error on the claimant’s VAT return. V. The submissions.[20]Mrs. Whipple contends that the claimants declared more output tax than it properly owed because of the bookkeeping error as a consequence of the failure to complete step one. According to Mrs. Whipple, the VAT properly due on sales made by the claimants in the United Kingdom was £1,320,645.37 but in error the claimants accounted for £1,640,435.30 and that this constituted a “duplication of output tax” of £319,787.93[21]Mr Mantle contends that the significant error which the claimants made was not to insert on their VAT return the figures relating to its activities but instead to insert those which should have been inserted on the VAT return of the United Kingdom company. He places emphasis on the VAT return of the claimants, which shows how the VAT payable by the claimants was calculated even though it is now common ground that this only shows what was supposed to be the VAT of the United Kingdom company. The figure in the claimants’ VAT return was erroneously stated to be £3,167,900.93 whereas it is common ground that the correct figure ought to have been £1,668,226.86.Mr Mantle also contends that neither this error nor the book keeping error involved any “simple duplication of output tax“.[22]Mrs. Whipple’s riposte is that although the figures inserted on the claimants’ VAT return were in fact the figures relating not to its activities but those of the United Kingdom company, this is irrelevant because: a) the bookkeeping error and the transposition error should be looked at separately. Mr. Mantle contends that they should be considered together in order to ascertain what was the cause of the over declaration (“Issue A”); b) to determine if a matter falls within the Concession requires examination, in the words of the claimants’ written skeleton argument (with their emphasis included) of “whether there has been a simple duplication of output tax in fact; and not as to whether that simple duplication of output tax is reflected in the VAT return of any given company”. The case for the HMRC is that it is the entries on the VAT return, which determine whether there has been a “simple duplication of output tax” (“Issue B”); c) the simple question of whether there has been an overpayment must receive the answer that there has been one by the claimants and that part of the overpayment in the sum of the amount claimed (£319,789.93) falls within the terms of the Concession. This is strongly disputed by the HMRC. (“Issue C”); and d) even if the claimants’ submission on Issue C is wrong, then the claimants could now submit new returns, which would correct the transposition error and have the appropriate figures for the claimants and for the United Kingdom company entered on the correct returns. Mr Mantle said that this is not possible, that in any event it is too late to do so and also it has not been done yet (“Issue D”). VI. Issue A.[23]The claimants contend that the bookkeeping error and the transposition error should be looked at separately. Mr. Mantle submits that they should be considered together in order to ascertain if the over-declaration falls within the terms of the Concession.[24]In my opinion, when there has been an overpayment of output tax, the terms of the Concession requires an answer to the question of whether an overpayment was a “simple duplication of out put tax” That exercise entails consideration of what caused this overpayment in order to see if it is covered by the Concession. If, for example, there were many errors which led to an overpayment of output tax, it would be wrong to focus simply on one error alone and say that as that caused a duplication of output tax, the Concession applies even if that single error was not the causative effect of the overpayment perhaps because of a further error or further errors. Thus I am unable to accept the claimants’ submission that the bookkeeping error and the transposition error should be looked at separately. VII. Issue B.[25]Mrs. Whipple contends that the Concession requires examination, in the words of the claimants’ written skeleton argument (with its emphasis repeated) as to “whether there has been a simple duplication of output tax in fact; and not as to whether that simple duplication of output tax is reflected in the VAT return of any given company”. The case for the HMRC is that it is the VAT return, which determines whether there has been a “simple duplication of output tax”.[26]It must not be forgotten first that the issue is whether there has been an actual “simple duplication of output tax” and second that the place where the amount of output tax actually paid is recorded is on the VAT return as that shows what amount of output tax has been regarded as correct by the party paying VAT. So I am unable to accept the claimants’ submission on this point and I intend to focus on the figure for output tax on the claimants’ VAT return. VIII. Issue C.[27]The case for the claimants is that in this case the simple question of whether there has been an overpayment must receive the answers first that there has been one by the claimants and second that part of it, which is the amount claimed by the claimants in this action, falls within the terms of the Concession. This is strongly disputed by the HMRC.[28]It is common ground that there has been an over declaration by the claimants but the issue is whether this over declaration involves a “simple duplication of output tax” by the claimants in the light of the principles accepted by both counsel, which were stated by Lightman J in the BT case and which I set out in paragraph 7 above.[29]There is in my view only one over-declaration by the claimants and that is the difference between what was stated in the VAT return put in on behalf of the claimants and the actual output tax due from the claimants. The figure which was inserted in box 1 of the claimant’s VAT form was what was supposed to be the United Kingdom company’s figure for output tax of £3,167,900.93 whereas it is common ground that the figure that should have been inserted was £1,668,226.86. That means that there has been an over-payment of £1,499,674.07.[30]I have already explained that both counsel agree, correctly in my view, that I should apply the definition of “simple duplication of input tax” given by Lightman J in the BT case. It is necessary to consider further what is meant by the word “duplication” because the main area of dispute between counsel related to whether what happened in this case is covered by that word. Counsel have been unable to find any relevant judicial definition of the word “duplication” but the Oxford English Dictionary (Second Edition Volume IV page1129) defines “duplication” as meaning:
“a. The action of doubling ...b .The making anything twice as many or as much; the repetition of an action or thing…”
[31]As I have explained, Lightman J. said that the word “simple duplication” means “only duplication and nothing else”. I respectfully agree with him that “the Concession only bites if the overpayment is a duplication (or doubling-up) of payment of output tax and the Concession cannot possibly be intended to require examination and evaluation of the degree of complication of any exercise to be undertaken”. Thus the claimants will only succeed in showing that their claim falls within the Concession if it can be established that there was “the action of doubling and nothing else”. I have concluded that they cannot do so and there are four reasons, some of which overlap but which individually or cumulatively have led me to this conclusion and I will now set them out in no particular order of importance.[32]First, the case for the claimants fails to take account of the fact that the claimants and the United Kingdom company are different entities and that the doubling-up of payment was not done by the same entity. In this case, the claimants initially paid the liability of the United Kingdom company but Mrs. Whipple contends that all that needs to be shown is that output tax has been duplicated. A fundamental aspect of the VAT regime is that each registered entity is regarded as a separate taxable person and so in my opinion, there has to be a doubling up of payment by the particular party claiming repayment for there to be a “simple duplication of output tax”. It must not be forgotten that the Concession does not apply to any duplication but only to a “simple duplication” and I have explained how Lightman J has said that the word “simple” should be construed so as to mean “only duplication and nothing else”. This duplication must be doubling up of payment by the same party as otherwise there cannot be “simple duplication” or even “duplication”.[33]In this case, there was no doubling up of payment of output tax by the claimants because if company A inserts company B’s output tax figures on its tax returns, this is not and cannot be a simple duplication of output tax by companyA. In other words although there was a fundamental error with the figures, there was no “simple duplication of output tax” because this was not “the action of doubling and nothing else”. What the claimants are contending for is something much more sophisticated as they are seeking to ignore the transposition error and by so doing they are requiring the court to extend the meaning of the Concession to cover something other than “the action of doubling and nothing else”. In other words, the claimants are seeking to adopt a different approach from that advocated correctly in my respectful view by Lightman J that “the Concession cannot possibly be intended to require examination and evaluation of the degree of complication of any exercise to be undertaken”.[34]The second reason is that it is necessary to identify the error, which caused the over- declaration, in order to determine if it falls within the Concession as a “simple duplication of output tax”. In my view, the claimants are incorrect in contending that it was the bookkeeping error as I consider that it was the transposition error, which caused the output tax error. This means that that there was not a “simple duplication of output tax”. The bookkeeping error might (subject to the points set out below) have been the cause of the error if (but only if) the figures which resulted from the bookkeeping error had been inserted on the claimants’ VAT return. This was not the position in this case because, as I have explained, the claimants did not insert the figures caused by the bookkeeping error on their VAT return but instead they inserted the figures for the United Kingdom company. Thus the error on the claimants’ VAT return was not caused by the bookkeeping error but by the transposition error, which crucially did not entail any duplication. In other words, the bookkeeping error had been overtaken or overwhelmed by the transposition error and the bookkeeping ceased to be the effective cause of any error in the claimants’ VAT return. So the bookkeeping error ceased to be the error of the claimants but became that of the United Kingdom company when the transposition error occurred.[35]I therefore agree with Mr. Mantle that although the claimants’ case for repayment is based on the bookkeeping error, this contention is based on a factual situation, which did not occur, namely that the claimants’ VAT returns reflected the bookkeeping error. The bookkeeping error was not inserted on the claimants’ VAT return because of the subsequent transposition error. So any error that was made was not a “duplication of output tax” and certainly not one which was in Lightman J’s words “only duplication and nothing else”.[36]Third, even if I am wrong about this analysis and that the bookkeeping error is to be regarded as the effective cause of the overpayment, I agree with Mr. Mantle that this error does not constitute a “duplication” because the Concession could have referred to “errors in output tax” but instead it is limited to “simple duplication of output tax”. The essential feature of duplication is paying twice and not merely making an overpayment.[37]It is noteworthy that Ms Randall, the bookkeeper who had the misfortune to make the errors which have given rise to the present claim, has explained in her commendably frank witness statement (with my emphasis added) that “16..The first manual adjustment (step 2) is not reversing any earlier negative error…”. Instead it created “an unmatched positive entry”. In consequence the figure introduced is unique, but it is not a duplication (simple or otherwise) even though it could lead to an overpayment but not to a duplication.[38]Thus, if a restaurant bill is for £30 but instead £40 is paid in error, this is an error in payment but it is not a duplication of payment, which would require the bill for £30 to be paid twice. Even if the transposition error is disregarded, there was not a “simple duplication of output tax”. It follows that the claim made by the claimants does not fall within the terms of the Concession.[39]A fourth reason why I cannot accept the claimants’ submission is that they are seeking to extend the meaning of the Concession beyond its ordinary meaning by ignoring its use of the word “simple” to qualify the word “duplication”. The word “simple” in the Concession was meant to have a specific meaning and it certainly did not cover the transposition error. IX. Issue D.[40]Mrs. Whipple contends that ,even if her other submissions are wrong and there was not a “simple duplication of output tax”, then the claimants could now submit new VAT returns, which would have the appropriate figures for the claimants and for the United Kingdom company entered on the correct VAT returns. Mr Mantle said that this is not possible, that in any event it is too late to do so and also it has not been done yet.[41]It must not be forgotten that the present application is a challenge to a decision of 10 March 2005 in which the HMRC refused to make repayments in respect of voluntary disclosures and it is that refusal which is the sole basis of the present claim. The claimants had not by 10 March 2005 put in new VAT returns and indeed they still have not done so. In my view, so there is no basis for considering this submission that a new return could now be filed as it is based on assumed facts rather than what actually happened. It therefore follows that these submissions of the claimants on this issue must fail but as I heard submissions relating to it, I will give a few brief comments about it on the assumption that the claimants have filed or a new VAT return for the relevant period which does suffer from the transposition error.[42]It is accepted that there is a facility for adjusting VAT returns after they have been submitted because the Customs and Excise Manual VolumeV1-35 Value Added Tax- Assessment and error correction contains in “Section 22 General principles :Returns requiring adjustments before processing”, provides that: “22.8. Transposed returns between different registration numbers Two situations may arise:• the trader renders two returns on two registration, each containing figures proper to the other registration; or• the trader renders one return but the figures on it are proper to another registration and the trader still has the return to the other registration. In the first case, if there is no revenue risk (i.e. both traders are on the same stagger), duplicate returns can be issued. These should be sent to Accounting, Adjustments Banking with a covering memo explaining the problem. Where returns are not on the same stagger, the trader must make a voluntary disclosure on both registration numbers. In the second example, you should advise the trader to complete and render the outstanding return with the figures proper to that registration and to make a voluntary disclosure to correct the error on the return previously submitted”.[43]The predecessors of the HMRC issued Notice 700-45, the title of which is “How to correct VAT errors and make adjustments or claims”. Section 4 of this document deals with “Correcting VAT errors on returns already submitted”. It states that there are two methods and the appropriate method depends on whether the error has a net value of more than £2000 but in both cases “you can only correct errors in accounting periods that ended three years ago or less”.[44]Paragraph 4.5 of that Notice states under the heading “What’s the time limit for correcting errors?” (with my emphasis added) that:
“Generally you cannot correct any errors that arose In accounting periods that ended more than three years earlier, unless the errors are; • simple duplications of output tax; or [a form of error which is not relevant to the present case]” • simple duplications of output tax; or [a form of error which is not relevant to the present case]”
[45]In support of her contention that the claimants can rely on these provisions, Mrs. Whipple points out that the transposition error will not have adverse financial consequences for the claimants, for the HMRC nor for the United Kingdom company because the only effect of the correction will be to ensure that the claimants entered on the VAT return in its name the figures, which were previously entered on the return of the United Kingdom company. Mrs. Whipple submits that the defendants have discretion as to whether to accept the VAT return but that this discretion must be exercised according to the general public principles of fairness and to guard against a risk to the Revenue.[46]Her submission is that there is no revenue risk in this case with the result that the HMRC can either ignore the error or it can issue a duplicate VAT return, which in any event would then enable the courts to deal with the Concession in relation to the sum of £319,789.93. Although this is an ingenious submission, I am unable to accept it for at least two reasons in addition, of course to the crucial and decisive factor set out in paragraph 41 above that no additional returns had been submitted before the decision under challenge was taken.[47]First, as I explained in paragraph 44 above, the errors, which arose in accounting periods more than three years earlier cannot be corrected unless there are errors of “simple duplication of output tax”. This, of course, is the same test as is set out in the Concession and so if the claimants cannot come within the Concession, they cannot put in a new VAT return after the time period has expired. In this case it is quite clear that the error which is being corrected is the insertion on the claimants’ VAT return of the figures which were attributable to a United Kingdom company. As I have explained in section VIII above, the only relevant exception (“simple duplication of output tax”) does not cover the transposition error.[48]Second, there is a discretion given to the HMRC to decide whether to accept a duplicate return. The HMRC have indicated through counsel that they would reject such an application. Such a decision could only be challenged on accepted public law principles. It is difficult before the claimants have even filed a duplicate return to predict with certainty the outcome of such a challenge.[49]The difficulties for the claimants in mounting such a challenge are that there has already been a substantial delay in submitting a duplicate return even since July 2005, which was when the Acknowledgement of Service made it clear to the claimants that the HMRC was contending that the transposition error precluded the claimants from relying on the Concession. I suspect that the claimants would have great difficulties in challenging a decision by the HMRC to refuse to accept an application to put in duplicate returns at this late stage.[50]Mr. Mantle puts forward other reasons why the claimants cannot rely on a duplicate return. All that needs to be said at this stage is that there would be substantial difficulties for the claimants in seeking to file duplicate returns but I need not come to a definite conclusion as no duplicate returns were relied upon by the claimants before the decision under challenge was taken. Thus I must reject the claimants’ submissions that they can file duplicate accounts.

X. Miscellaneous Matters

[51]In reaching these conclusions, I have not overlooked the submission of Mrs. Whipple that I should take account of two cases where taxpayers’ claims have been allowed by HMRC although she correctly states in her written skeleton argument that “the claimant does not suggest great weight can be put on the details of the Lend Lease and Deutsche Bank claims”.[52]First, the claim brought by Lend Lease Ltd for repayment led to litigation which was by way of judicial review and which was subsequently compromised. Clearly if there had been a judicial decision on the applicability or the meaning of the words “simple duplication of output tax” to the facts of that case, it would have been or could have been of great value but what happened was that the parties reached a compromise. I have no idea if this compromise was reached, for example, because of a lack of evidence or if it was part of a compromise relating to other matters. In any event, I am not satisfied that the claimant’s cause is assisted by the terms of settlement reached in that case and significantly, the claimants do not contend either that they had any legitimate expectation that their claim would be treated other than under the terms of the Concession or that this is case of discriminatory treatment of the claimants. The other cases referred to by Mrs. Whipple concerning the claims by Deutsche Bank and Nomura are of less significance as there are fewer details of them.[53]During the course of submissions there were many suggestions of “floodgates” arguments or contentions that a decision in favour of HMRC might or might not “open the barn door”. I am bound to say I did not find those submissions helpful as it is common ground that my task is to construe the Concession, which has now been repealed, and not to consider the consequences of my decision.[54]As I have explained in paragraph 2 above, the Concession was withdrawn in 2005 but neither that fact nor the circumstances in which it was with drawn assist me in my task which has been to construe the terms of the Concession and its applicability to the claimants’ VAT return for the period 12/99.

XI. Conclusion

[55]For the reasons which I have sought to explain, this claim must be refused. It might be some consolation for the claimants to appreciate that every conceivable argument has been put forward with commendable skill by Mrs. Whipple as have the contrary arguments by Mr. Mantle.