“…an appeal shall lie to the tribunal with respect to any of the following matters: … (p) an assessment (i) under section 73(1) or (2) in respect of a period for which the appellant has made a return under this Act; …”
“…questions of jurisdiction cannot be determined by consent, still less by default. The question whether or not a tribunal has jurisdiction to determine a question is a question of law. The answer to it depends upon the correct interpretation of the legislation creating its jurisdiction and cannot depend on the conduct of one of the parties.”
“When Staysure commenced this Appeal on25 March 2017 it had not filed a VAT Return for the Period. Staysure only filed a VAT return for the Period, a ‘nil’ return, on22 January 2018 . Thus, when Staysure commenced this appeal it did not fulfil the requirement imposed by s 83(1)(p)(i) VATA that the appeal must be ‘in respect of a period for which the appellant has made a return under the Act.’ However, in all the circumstances of this case, given that a VAT Return for the Period has now been made by Staysure, HMRC does not pursue any point it may have based on the initial failure to make a VAT return for the Period.”
“(1) An irregularity resulting from a failure to comply with any requirement in these Rules, a practice direction or a direction does not of itself render void the proceedings or any step taken in the proceedings.
“In the context of an appeal right which must be exercised within 30 days from the date of the document notifying the decision, a delay of more than three months cannot be described as anything but serious and significant.”
“Need a quote today? Don’t forget to take out travel insurance when you are travelling in the UK or abroad. Talk to our travel insurance experts on [number] or visit us online for a quote.”
“as you increase prices, you will reduce the number of price enquiries that convert into sales. The reverse is also true, as you reduce prices you will increase the proportion that convert into sales. The amount a price increase or reduction influences sales conversion alters from customer segment to segment, and for things like different travel destinations and durations.”
“to your use of this site and provide a legal document which sets out your rights and obligations, and those of Staysure Travel in relation to the holiday services offered through this site. Reference on this website to ‘our’, ‘we’ and ‘us’ are references to Staysure Travel and Staysure.co.uk Ltd.”
“The Website is operated by Intervest Limited, registered in Gibraltar (Incorporation Number 95406) as an intermediary. Your data will be passed to Staysure.co.uk limited, and become the property of staysure.co.uk, at the point your quote is complete.”
“The reality is that the call centre and the Website were not viewed by Intervest or Staysure as separate means of attracting and filtering prospects, since the Website and the call centre were part of an overall, integrated supply by Intervest of identifying and attracting prospects. The call centre would not have completed the volume of transactions it did if there had not been the Website operated by Intervest, the activities of Intervest in driving suitable prospects to the Website, the quotation process on the Website and the facilitation of the passage of suitable prospects from the Website to the call centre.”
“28. However, as the court held in Faaborg-Gelting Linien A/Staysure v Finanzamt Flensburg (Case C-231/94 )[1996] STC 774 at 783,[1996] ECR I-2395 at 2411-2412, paras 12 to 14, concerning the classification of restaurant transactions, where the transaction in question comprises a bundle of features and acts, regard must first be had to all the circumstances in which that transaction takes place. 29. In this respect, taking into account, first, that it follows from art 2(1) of the Sixth Directive that every supply of a service must normally be regarded as distinct and independent and, second, that a supply which comprises a single service from an economic point of view should not be artificially split, so as not to distort the functioning of the VAT system, the essential features of the transaction must be ascertained in order to determine whether the taxable person is supplying the customer, being a typical consumer, with several distinct principal services or with a single service. 30. There is a single supply in particular in cases where one or more elements are to be regarded as constituting the principal service, whilst one or more elements are to be regarded, by contrast, as ancillary services which share the tax treatment of the principal service. A service must be regarded as ancillary to a principal service if it does not constitute for customers an aim in itself, but a means of better enjoying the principal service supplied...”
“21. In that regard, the Court has held that there is a single supply in particular in cases where one or more elements are to be regarded as constituting the principal supply, whilst one or more elements are to be regarded, by contrast, as ancillary supplies which share the tax treatment of the principal supply (Card Protection Plan[1999] STC 270 ,[1999] 2 AC 601 , para 30…). 22. The same is true where two or more elements or acts supplied by the taxable person to the customer, being a typical consumer, are so closely linked that they form, objectively, a single, indivisible economic supply, which it would be artificial to split.”
“In return for payment of an entrance fee Město Žamberk provides a municipal aquatic park, in which there are, in particular, a swimming pool divided into several lanes and equipped with diving boards, a paddling pool for children, water slides, a massage pool, a natural river for swimming, a beach-volleyball court, areas for table tennis and sports equipment for hire.”
“In order to determine whether a single complex supply must be categorised as a supply closely linked to sport within the meaning of art 132(1)(m) of the VAT Directive although that supply also includes elements not having such a link, all the circumstances in which the transaction takes place must be taken into account in order to ascertain its characteristic elements and its predominant elements must be identified…”
“It follows from the case law of the court that the predominant element must be determined from the point of view of the typical consumer…and having regard, in an overall assessment, to the qualitative and not merely quantitative importance of the elements falling within the exemption provided for under art 132(1)(m) of the VAT Directive in relation to those not falling within that exemption…”
“[76] There are good reasons for saying that [the overarching test] has or may have a part to play in at least some cases. First, it seems to have been the sort of point taken by the majority of the House of Lords in [College of Estate Management v C&E Comrs[2005] UKHL 62 ]. Second, in some cases at least it may reflect how the typical consumer (whose viewpoint is critical ˗ see Mesto) views a transaction. It would be entirely consistent with a regime in which a supply question has to be answered by reference to the view of the typical consumer of the supply. Third, in many cases a consideration of the point may assist in deciding whether a given element predominates or not in the eyes of the typical consumer for the purposes of the legislative provision in question. Thus in the circumstances of [Byrom v R&C Comrs[2006] EWHC 111 ], the Mesto question would be what the typical consumer thinks he or she is acquiring. In order to determine that, a Mesto analysis has to consider the elements in the supply, and whether they fall predominantly within the relevant characterisation or not by judging their relative importance from the point of view of the typical consumer. It may be that, as in Byrom, there is a main element which, at least quantitatively, predominates over the others. But if the consumer thinks that he or she is acquiring something larger, that is to say massage parlour services, then the licence of the room cannot be said to predominate for the purposes of the Mesto test. Whether or not it is a separate test, the factor is at least capable of being a counterweight to an element that might otherwise be thought to predominate or, within a Mesto test, an indication of the qualitative importance attached to other elements by a typical consumer. It may be that Beynon is an example of that. We do not think that if the consumer would have an overall perception it could be ignored consistently with Mesto. [77] To that extent, therefore, the reasoning underpinning a separate 'overarching' test has a part to play in the reasoning in other tests. We would, were it necessary, be minded to go further and say that there may be some cases where the economic realities justify its application as a separate test. We say this for two reasons. First, as appears above, the CJEU has recognised the difficulties in prescribing definitive tests for all cases in relation to the 'number of supplies' point, and that is capable of applying to the characterisation point as well, bearing in mind its close relationship to the ‘number of supplies’ point. Second, there may well be cases in which the economic realities, which again underpin the exercise, require it to be adopted. Whether or not the present case is one of them is not something we have to decide, because we can reach our decision on other grounds by reference to the other tests, where available. [78] On the basis of those authorities we find: (1) The Mesto predominance test should be the primary test to be applied in characterising a supply for VAT purposes. (2) The principal/ancillary test is an available, though not the primary, test. It is only capable of being applied in cases where it is possible to identify a principal element to which all the other elements are minor or ancillary. In cases where it can apply, it is likely to yield the same result as the predominance test. (3) The ‘overarching’ test is not clearly established in the ECJ jurisprudence, but as a consideration the point should at least be taken into account in deciding averments of predominance in relation to individual elements, and may well be a useful test in its own right.”
“The provision by an insurance broker or insurance agent of any of the services of an insurance intermediary in a case in which those services (a) are related (whether or not a contract of insurance or reinsurance is finally concluded) to an insurance transaction or a reinsurance transaction; and (b) are provided by that broker or agent in the course of his acting in an intermediary capacity.”
“For the purposes of item 4 services are services of an insurance intermediary if they fall within any of the following paragraphs (a) the bringing together, with a view to the insurance or reinsurance of risks, of (i) persons who are or may be seeking insurance or reinsurance, and (ii) persons who provide insurance or reinsurance; (b) the carrying out of work preparatory to the conclusion of contracts of insurance or reinsurance; (c) the provision of assistance in the administration and performance of such contracts, including the handling of claims; (d) the collection of premiums.”
“For the purposes of item 4 an insurance broker or insurance agent is acting in an intermediary capacity wherever he is acting as an intermediary, or one of the intermediaries, between (a) a person who provides insurance or reinsurance, and (b) a person who is or may be seeking insurance or reinsurance or is an insured person.”
“Item 4 does not include (a) the supply of any market research, product design, advertising, promotional or similar services; or (b) the collection, collation and provision of information for use in connection with market research, product design, advertising, promotional or similar activities.”
“the acceptance of applications for insurance, the handling of amendments to contracts and premiums, the issuing, management and rescission of policies, the management of claims, the setting and paying of commission to insurance agents, the organisation and management of information technology, the supply of information to UL and to insurance agents and the drafting of reports for insured parties and third parties….When the information supplied by an applicant for insurance shows that a medical examination is necessary, the decision on acceptance of the risk is made by UL, otherwise that decision is made by [Andersen] and binds UL. [Andersen] is in charge of almost all contact with the insurance agents.”
“…the fact that an insurance broker or agent does not have a direct relationship with the parties to the insurance or reinsurance contract in the conclusion of which he has been instrumental, but merely an indirect relationship with them through the intermediary of another taxable person who is, himself, in a direct relationship with one of those parties, and to whom that insurance broker or agent is contractually bound does not prevent the service provided by the latter from being exempt from VAT under that provision.”
“I agree with Ms Sloane that Beheer shows that, while there is a need to exercise the characteristic functions of an agent or broker, what is not required is a direct legal relationship with both or either of the ultimate parties, namely the insurers and those seeking insurance. It is sufficient that the insurance agent or insurance broker is carrying out a vital intermediary role in a chain of intermediaries.”
“(1) The Insurance Intermediary Exemption should be interpreted so far as possible, consistently with its terms, in a way that reflects the jurisprudence of the ECJ and the United Kingdom's obligations under the Sixth Directive and the 2006 VAT Directive... (2) The exemption in art 13B(a) must be interpreted strictly since it constitutes an exception to the general principle that VAT is to be levied on all services supplied by a taxable person. This does not mean, however, that the words and expression in art 13B(a) and the Insurance Intermediary Exemption are to be given a particularly narrow or restricted interpretation. It is for the supplier to establish that it and its activities come within a fair interpretation of the words of the exemption. (3) The exemption for ‘related services’ under art 13B(a) only applies to services performed by persons acting as an insurance broker or an insurance agent. Although those expressions are not defined by EU legislation, they are independent concepts of Community law which have to be placed in the general context of the common system of VAT. (4) Whether or not a person is an insurance broker or an insurance agent, within art 13(B) depends on what they do. How they choose to describe themselves or their activities is not determinative. (5) The definitions of ‘insurance broker’ and ‘insurance agent’ in the Insurance Directive are relevant to the meaning of the same expressions in art 13B(a) to the extent, but only to the extent, that they should be taken into consideration as reflecting legal reality and practice in the area of insurance law. It is not necessary, in order to invoke the exemption in art 13B(a), for the taxpayer to perform precisely the description of activities in art 2(1)(a) or (b) of the Insurance Directive. (6) On the other hand, the mere fact that a person is performing one of the activities described in art 2(1)(a) or (b) of the Insurance Directive or the definition of ‘insurance mediation’ in the Insurance Mediation Directive does not automatically characterise that person as an insurance agent or an insurance broker for the purposes of art 13B(a). (7) It is an essential characteristic of an insurance broker or an insurance agent, within art 13B(a), that they are engaged in the business of putting insurance companies in touch with potential clients or, more generally, acting as intermediaries between insurance companies and clients or potential clients. (8) It is not necessary, in order to claim the benefit of the exemption in art 13B(a), for a person to be carrying out all the functions of a insurance agent or broker. It is sufficient if a person is one of a chain of persons bringing together an insurance company and a potential insured and carrying out intermediary functions, provided that the services which that person is rendering are in themselves characteristic of the services of an insurance agent or broker. (9) All the above principles are capable of being applied, and must be applied, to the Insurance Intermediary Exemption in Sch 9 to VATA 1994.”
“Although HMRC's case is that the relevant functions performed by InsuranceWide and Trader Media were nothing more than the provision of a ‘click through’ facility to a broker, agent or insurer, it is plain that both taxpayers were doing much more than that. They identified, and provided those looking for insurance with access to, insurers who provided a range of competitive insurance products. In both cases the evidence indicated that the insurers were appraised and selected bearing in mind the competitiveness of their pricing and products and their level of consumer service. …InsuranceWide provided those seeking insurance with a means of directing them most effectively and efficiently to the most appropriate insurers, whether directly or through another intermediary, to match their requirements. In the case of Trader Media the evidence was that it not only had an input into the questions to be answered by those seeking insurance, but, importantly, it made suggestions for the composition of the insurance panel based on its understanding of the experience and demographics of the consumers and with a view to providing customers with insurers who would quote competitive prices. Neither of them were, as Ms Sloane emphasised, a mere “conduit”
“For the reasons I have given, I reject the proposition of law advanced by HMRC that neither InsuranceWide nor Trader Media can claim the benefit of the Insurance Intermediary Exemption because they did not have a legal relationship with either the insurer or the insured or the prospective insured. It is sufficient that they were providing services characteristic of an insurance broker or agent, and which were vital to the process of introducing those seeking insurance with insurers, even if they were only part of a chain of such persons. In any event, they did have direct relations with the customers who used their website, just as much as Beheer, and they did have collaborative arrangements with intermediaries who did have legal relations with insurers. It would therefore also be immaterial that neither InsuranceWide nor Trader Media had anything to do with the negotiation of the terms of the insurance contract or its preparation or the collection of premiums or the handling of claims.”
“this would be just from a click-through on a link on Prudential's website…A click leads to a series of 'Prudential' pages which are in fact maintained by UKI, and when the customer clicks the 'buy' button he then enters into UKI's own website. But the important thing to note is that before he gets there, all the other relevant general insurance pages are maintained by UKI, not by Prudential.”
“First, and most importantly, in relation to bringing the parties together (or introducing them), Prudential did not do this. Any bringing together (or introduction) of Prudential and the insured has happened in the past and may have been performed by a broker at the time.”
“…When seeing if Prudential was doing the same sort of thing that a broker does one starts with a key distinction. A customer engaging with, or dealing through, a broker (or other intermediary) is likely to know that that person is an intermediary, or at least likely to know that that person is not the end insurer. Even the customers in InsuranceWide will have known that somehow they moved on from the website providers and had gone on to deal with someone else. Contrast the apparent position in this case. So far as the original renewals of Prudential general insurance policies were concerned, there is no relevant dealing at all between customer and Prudential. Prudential merely passes on the renewal information to UKI, who take it from there. There is nothing at all akin to the sort of approach that a customer makes to a broker. So far as Lead A customers are concerned, Prudential does nothing in relation to the individual customers in question except to provide a click-through facility on its website so that the customer is in fact looking at pages maintained on the Prudential website by UKI, until he clicks the 'buy' button when he enters UKI's own website. The parties did not fall over themselves to make sure that it was suddenly made apparent that the customer was not dealing with Prudential as soon as he clicked on to the first general insurance page. Nor is it apparent that he would suddenly have the realisation when he 'buys'. That would have gone completely against the whole purpose of using the Prudential branding. So far as Leads B to D are concerned, there is no suggestion that Prudential made it clear to the customer that it was no more than an intermediary, and again it would seem to go against the purpose of the exploitation of the brand that it should do so. The customer has not approached Prudential as an intermediary. All this does not, in my view, amount to bringing the parties together, or amount to introducing them, as a broker does.”
“[49] The matter can be put in various ways, deploying the factors that I have identified above. (i) It would not be an inaccurate metaphor to describe Prudential as a mere conduit. That is particularly clear in relation to Lead A customers, and is apparent in relation to the other categories of lead as well. In all cases Prudential hands over customer details, apparently without more, and then lets UKI get on with it. UKI undertakes all subsequent activity in relation to that customer, whether or not a contract of insurance results. (ii) Prudential has no freedom of choice as to whom the customer should be referred to. Every inquiry is passed to UKI, and to UKI alone. (iii) If one contrasts Prudential's activities with the activities of referring companies in InsuranceWide, one can plainly see that Prudential's activities fall far short of the sort of activities which made the relevant companies 'brokers' in InsuranceWide. Of course, it would not be an acceptable way of deciding this point to say that Prudential did not behave like those other companies, therefore they cannot be brokers, without more. But it is instructive to see what it was that made those other companies something other than conduits, and those factors do not exist in this case. (iv) Again, one can look at it in terms of whether Prudential is supplying the services of a broker in the course of carrying on the business of a broker. From its own point of view it does not really conduct a separate business, or supply services. So far as the customer is concerned, this takes up the point made above. A pure renewals customer does not really know that anything material has happened at all. A Lead A customer clicks away on the website, with no-one telling him that he is, in substance, now dealing with another insurance company, and he certainly does not know that Prudential has done anything useful. From the point of view of the customer in relation to Leads B to D, it will not be apparent that Prudential is providing any services at all. Although I was not shown the sort of material that passed between Prudential and those approaching it, as I have already observed it would undermine the whole point of maintaining the Prudential brand were the customer to be clearly told that Prudential would not be providing insurance, and some other completely different company would. The customer doubtless thinks it is approaching an insurance company for insurance, not a broker for broking purposes. The customer will not believe that he/she is receiving broking services, and in truth he/she is not. His/her inquiry is being passed on to another company which provides insurance that Prudential no longer provides. That is all. There is only the business of an insurer; there is no business of broking. [50] The other positive activities of Prudential, described above, do not stand in the way of that conclusion. Most of those activities have nothing to do with the introductions or the individual policies. An analysis of them reveals that they help to refine policy terms, to refine the marketing necessary to sell policies and to maintain the Prudential brand when it is applied to non-Prudential policies. If anything, they fall on the same side of the line as the activities in Arthur Andersen…they are the sort of activities that insurance companies do, not insurance brokers.”
“37. For the purpose of this examination, two conditions are required to be met. In the first place, the service provider must have a relationship with both the insurer and the insured party (judgment in Taksatorringen, para 44). That relationship can be only indirect if the provider is a sub-contractor of the broker or agent (see, to that effect, judgment in Beheer, para 29). In the second place, its activities must cover the essential aspects of the work of an insurance agent, such as the finding of prospective clients and their introduction to the insurer (see, to that effect, judgment in Arthur Andersen, paras 33 and 36). 38. The first of those conditions is met by a service provider such as Aspiro. That service provider is in a direct relationship with the insurance company, since it performs its activities in the name and on behalf of the insurance company, and it has an indirect relationship with the insured party, in the context of the examination and management of claims. 39. On the other hand, as regards the second of those conditions, relating to the services provided by insurance brokers and agents, or their sub-contractors, those services must be linked to the essential aspects of the work of an insurance broker or agent, which consists in the finding of prospective clients and their introduction to the insurer with a view to the conclusion of insurance contracts (see, in particular, judgments in Taksatorringen, para 45; Arthur Andersen, para 36, and Beheer, para 18). As regards a subcontractor, it is necessary for it to be involved in the conclusion of insurance contracts (see, to that effect, judgment in Beheer, paras 9 and 18).”
“The overseas transactions in question fell into two respective categories, namely 'L' and 'A'. In the L transactions, a potential borrower used a website belonging to the overseas entity completed an online application form which was subsequently sent to the taxpayer, which could choose whether to accept the lead or not. The A transactions involved 'conversions' and 'live chat'. Conversions involved the overseas entity calling a borrower who had been made an offer of a loan by the taxpayer but had not accepted it to try to persuade the borrower to take out the loan. Live chat involved the overseas entity's staff providing online help and support to actual and potential borrowers.”
“Moreover, HMRC's suggested proposition would seem to me to remove exemption from persons who have always clearly been seen as financial and/or insurance brokers in the original meaning of the word. It is well known, not to say notorious, that historically some brokers have selected as the service provider to recommend to the borrower the one paying them the best rate of commission. That is one of the reasons why there has been regulation of brokers and a requirement for transparency about rates of commission earned. But it seems to me that that is a matter for regulation and not for VAT law: if brokers who make recommendations to borrowers based on the broker's self-interest were intended to be liable to charge VAT on their commission I would expect the Directive to have said so.”
“…it is necessary to ascertain whether two criteria are fulfilled. In the first place, the supplier of services must be related to the insurer and the insured party, since that relationship may be indirect only if the supplier of services is a subcontractor of the broker or agent. In the second place, its activities must cover the essential aspects of the work of an insurance agent, such as the finding of prospective clients and their introduction to the insurer, with a view to concluding insurance contracts.”
“A customer engaging with, or dealing through, a broker (or other intermediary) is likely to know that that person is an intermediary, or at least likely to know that that person is not the end insurer. Even the customers in InsuranceWide will have known that somehow they moved on from the website providers and had gone on to deal with someone else.”
“An assessment under subsection (1), (2) or (3) above of an amount of VAT due for any prescribed accounting period must be made within the time limits provided for in section 77 and shall not be made after the later of the following— (a) 2 years after the end of the prescribed accounting period; or (b) one year after evidence of facts, sufficient in the opinion of the Commissioners to justify the making of the assessment, comes to their knowledge.”
“(1) Subject to the following provisions of this section, an assessment under section 73…shall not be made (a) more than 4 years after the end of the prescribed accounting period…concerned…”
“In any case falling within subsection (4A), an assessment of a person ("P"), or of an amount payable by P, may be made at any time not more than 20 years after the end of the prescribed accounting period.”
“Those cases are: (a) a case involving a loss of VAT brought about deliberately by P (or by another person acting on P's behalf), (b) a case in which P has participated in a transaction knowing that it was part of arrangements of any kind (whether or not legally enforceable) intended to bring about a loss of VAT, (c) a case involving a loss of VAT attributable to a failure by P to comply with a notification obligation, and (d) a case involving a loss of VAT attributable to a scheme in respect of which P has failed to comply with an obligation under paragraph 6 of Schedule 11A.”
“A taxable person shall (a) in respect of supplies made by him (b) in respect of the acquisition by him from other member States of any goods account for and pay VAT by reference to such periods (in this Act referred to as "prescribed accounting periods") at such time and in such manner as may be determined by or under regulations and regulations may make different provision for different circumstances.”
“(1) Every person who is registered or was or is required to be registered shall, in respect of every period of a quarter or in the case of a person who is registered, every period of 3 months ending on the dates notified either in the certificate of registration issued to him or otherwise, not later than the last day of the month next following the end of the period to which it relates, make to the Controller a return in the manner prescribed in regulation 25A showing the amount of VAT payable by or to him and containing full information in respect of the other matters specified in the form and a declaration, signed by that person or by a person authorised to sign on that person's behalf, that the return is correct and complete; provided that (a) …; (b) the first return shall be for the period which includes the effective date determined in accordance with Schedules 1, 1A,1 2, 3 and 3A to the Act upon which the person was or should have been registered, and the said period shall begin on that date; (c) where the Commissioners consider it necessary in any particular case to vary the length of any periodor the date on which any period begins or ends or by which any return shall be made, they may allow or direct any person to make returns accordingly, whether or not the period so varied has ended;”
“So read, it means that in all cases where it is impossible for the commissioners to split the assessment up into three-monthly periods, they can assess the amount of tax for any period of time which they specify, be it six, 12, 15 or 21 months, and such assessment will be good.
“far from this being disadvantageous to the trader, it means that the limitation period starts with the very earliest prescribed accounting period of three months which is covered by the assessment which has been made on him, so that if the commissioners take that course under no circumstance can the trader be prejudiced.”
“It is undoubtedly permissible for the commissioners to make a single or 'global' assessment which covers more than one accounting period. In practice this may be necessary when it is impossible or impracticable for the commissioners to identify the specific accounting period or periods for which the tax claimed is due… The power for the commissioners to make a global assessment is, however, not confined to those cases where it is impossible or impracticable to identify the specific accounting period or periods for which the tax claimed is due”
“It is accepted that only the final assessment was in the time limit set out in s 73(6)(a).
“Section 73 has to be construed as a whole. Section 73(1) provides that the commissioners 'may assess the amount of VAT due from him to the best of their judgment and notify it to him'…Subsection (6) is to protect the taxpayer from tardy assessment, not to penalise the commissioners for failing to spot some fact which, for example, may have become available to them in a document obtained during a raid. Against that background, sub-s (6)(b) is clear. The relevant evidence of facts is that which was considered, in the opinion of the commissioners, to justify the making of the assessment. The one-year time limit runs from the date when the facts constituting the evidence came to the knowledge of the commissioners. That was the construction adopted by the tribunal and the judge. It accords with similar views expressed in other cases in respect of similar provisions in earlier legislation.”
“The third point does not strictly arise and did not indeed arise on the tribunal's view of the facts, but I shall deal with it shortly because it has been argued. It is whether the commissioners could have relied on s 77(4) of the 1994 Act against Mr and Mrs Hindle. It does not arise, because in this case there is a single assessment on Mr and Mrs Hindle. If the single assessment had been construed as a series of assessments in respect of the three lots of three months, then, in respect of at least two of those periods, it would have been outside the three-year period permitted by s 77(1) and it would, therefore, have been necessary for the commissioners, if they could, to have brought themselves within s 77(4). I do not think it is open to me (even if I thought it right, which I do not) to hold that the single assessment should be treated as four separate assessments in respect of the three lots of three months from1 December 1995 and the one month of September 1996.”
“A mere passing remark or a statement or assumption on a matter that has not been argued is one thing, a considered judgment on a point fully argued is another, especially where, had the facts been otherwise, it would have formed part of the ratio. Such judicial dicta, standing in authority somewhere between a ratio decidendi and an obiter dictum, seem to me to have a weight nearer to the former than the latter.”
“Where a person is registered late for VAT, it is open to the Commissioners to make a 'long period' direction under reg 25(1)(c), directing that the first return should cover the entire period from the date when the person ought to have been registered until a point in time after the date of registration. The practice is illustrated by such cases as Bjellica (t/a Eddy's Domestic Appliances) v Customs and Excise Comrs[1995] STC 329 and Hindle (t/a D J Baker Bar) v Customs and Excise Comrs[2003] EWHC 1665 (Ch) ,[2004] STC 412 . By issuing such a direction the Commissioners can avoid periods becoming out of time for assessment under provisions of the 1994 Act (such as ss 73(6) and 77(1)) which allow an assessment to be made only within a specified period following the end of a prescribed accounting period.”
“It follows from the foregoing that there was no prescribed accounting period lasting from18 September 1995 to31 July 2002 : the respondents were, instead, required to make returns in respect of each quarterly period, and for the final period of one month, which elapsed between those dates (the first period being somewhat shorter by virtue of reg 25(1)(b)). If the Commissioners considered it necessary that a single return should be made in respect of the entire period from18 September 1995 to31 July 2002 , it was open to them to make a direction to that effect under reg 25(1)(c). They did not do so.”
“An assessment of the amount of any duty of excise due from any person shall not be made under this section at any time after whichever is the earlier of the following times, that is to say– (a) …the end of the period of three years beginning with the time when his liability to the duty arose; and (b) the end of the period of one year beginning with the day on which evidence of facts, sufficient in the opinion of the Commissioners to justify the making of the assessment, comes to their knowledge;…”
“123…The principle that if part of a global assessment is out of time then the whole assessment fails was clearly established to protect the taxpayer against the prejudice that could by caused to him by the Respondents choosing to use a global assessment rather than a series of separate assessment and thereby bundling together demands that would be out of time if made separately with those that were in time. As the Court of Appeal in Pegasus Birds observed in the passage quoted at [20] above, the time limit provisions are there to protect the taxpayer from tardy assessment; permitting the Respondents to use a global assessment…to defeat assessments in respect of particular excise duty points that would otherwise be out of time is inconsistent with that principle. 124. In my view the VAT authorities demonstrate that when a global assessment is made, so as to create an accounting period which covers a number of prescribed accounting periods, then for the assessment to be valid it must be in time for all of the prescribed accounting periods that it covers. This is readily apparent from the way the Court of Appeal formulated the principle in Grange: see the passage from Templeman LJ's judgment quoted at [31] above where the statutory wording was interpreted so as to read in words permitting an assessment to be expressed to cover a period including a number of prescribed accounting periods.”
“As regards the latter principle [of effectiveness], the Court has held that it is compatible with EU law to lay down reasonable time-limits for bringing proceedings in the interests of legal certainty which protects both the taxpayer and the authorities concerned. Such time-limits are not liable to render impossible in practice or excessively difficult the exercise of rights conferred by EU law. However, in order to serve their purpose of ensuring legal certainty, limitation periods must be fixed in advance (Marks & Spencer, paragraphs 35 and 39 and the case-law cited.”
“according to settled case-law, the principle of legal certainty, the corollary of which is the principle of the protection of legitimate expectations, requires that rules involving negative consequences for individuals should be clear and precise and that their application should be predictable for those subject to them (see, inter alia,Case C-17/03 VEMW and Others[2005] ECR I-4983 , paragraph 80). As has been observed in paragraph 33 of this judgment, limitation periods must be fixed in advance if they are to serve their purpose of ensuring legal certainty.”
“the starting-point - and usually the end-point - is to find ‘the natural and ordinary meaning’ of the words there used, viewed in their particular context (statutory or otherwise) and in the light of common sense.”
“Legislation is generally assumed to be put together carefully with a view to producing a coherent legislative text. It follows that the reader can reasonably assume that the same words are intended to mean the same thing and that different words mean different things. Like all linguistic canons of construction this is no more than a starting point. These presumptions may be rebutted expressly or by implication.”
“where the Commissioners consider it necessary in any particular case to vary the length of any period or the date on which any period begins or ends or by which any return shall be made, they may allow or direct any person to make returns accordingly, whether or not the period so varied has ended;…”
“An assessment under subsection (1), (2) or (3) above of an amount of VAT due for any prescribed accounting period must be made within the time limits provided for in section 77 and shall not be made after the later of the following— (a) 2 years after the end of the prescribed accounting period; or (b) one year after evidence of facts, sufficient in the opinion of the Commissioners to justify the making of the assessment, comes to their knowledge.”
“When making an assessment in respect of a long first period the provisions of Section 73 and Section 77 VATA 94 will normally allow us to assess for the whole of the prescribed accounting period. Where possible officers should raise their assessments in recognition of the appropriate time limits as follows; • Section 73(6)(a) VATA 94 if the end of the prescribed accounting period is within 2 years of the date of the assessment • Section 77(1)(a) VATA 94 if the end of the prescribed accounting period is more than 2 years but within 4 years of the date of the assessment • Section 77(4) VATA 94 if the end of the prescribed accounting period is more than 4 years after the date of the assessment…. When making an assessment under Section 77(1)(a) or 77(4), remember that you are still required to make your assessment under the one year evidence of facts rule contained in Section 73(6)(b) VATA 94.”
“(1) In any case where— (a) a person fails to comply with any of paragraphs 5, 6…of Schedule 1… he shall be liable, subject to subsections (8) and (9) below, to a penalty equal to the specified percentage of the relevant VAT or, if it is greater or the circumstances are such that there is no relevant VAT, to a penalty of£50 …. (3) In subsection (1) above “relevant VAT” means (subject to subsections (5) and (6) below)— (a) in relation to a person's failure to comply with paragraph 5, 6 of Schedule 1, the VAT (if any) for which he is liable for the period beginning on the date with effect from which he is, in accordance with that paragraph, required to be registered and ending on the date on which the Commissioners received notification of, or otherwise became fully aware of, his liability to be registered… (4) For the purposes of subsection (1) above the specified percentage is— (a) 5 per cent where the relevant VAT is given by subsection (3)(a) or (b) above and the period referred to in that paragraph does not exceed 9 months or where the relevant VAT is given by subsection (3)(c) above and the failure in question did not continue for more than 3 months; (b) 10 per cent where that VAT is given by subsection (3)(a) or (b) above and the period so referred to exceeds 9 months but does not exceed 18 months or where that VAT is given by subsection (3)(c) and the failure in question continued for more than 3 months but did not continue for more than 6 months; and (c) 15 per cent in any other case…. (8) Conduct falling within subsection (1) above shall not give rise to liability to a penalty under this section if the person concerned satisfies the Commissioners or, on appeal, a tribunal that there is a reasonable excuse for his conduct.”
“(1) Where a person is liable to a penalty under sections 60, 63, 64, 67, 69A or 69C…, the Commissioners or, on appeal, a tribunal may reduce the penalty to such amount (including nil) as they think proper. (2) In the case of a penalty reduced by the Commissioners under subsection (1) above, a tribunal, on an appeal relating to the penalty, may cancel the whole or any part of the reduction made by the Commissioners. (3) None of the matters specified in subsection (4) below shall be matters which the Commissioners or any tribunal shall be entitled to take into account in exercising their powers under this section. (4) Those matters are— (a) the insufficiency of the funds available to any person for paying any VAT due or for paying the amount of the penalty; (b) the fact that there has, in the case in question or in that case taken with any other cases, been no or no significant loss of VAT; (c) the fact that the person liable to the penalty or a person acting on his behalf has acted in good faith.”
“If a formal enquiry is conducted by HMRC into the liability of supplies in complex circumstances, you should mitigate the penalty by not imposing the penalty for the period of the enquiry.”
“70. …the task facing the FTT when considering a reasonable excuse defence is to determine whether facts exist which, when judged objectively, amount to a reasonable excuse for the default and accordingly give rise to a valid defence. The burden of establishing the existence of those facts, on a balance of probabilities, lies on the taxpayer… 71. In deciding whether the excuse put forward is, viewed objectively, sufficient to amount to a reasonable excuse, the tribunal should bear in mind all relevant circumstances; because the issue is whether the particular taxpayer has a reasonable excuse, the experience, knowledge and other attributes of the particular taxpayer should be taken into account, as well as the situation in which that taxpayer was at the relevant time or times (in accordance with the decisions in The Clean Car Co and Coales). 72. Where the facts upon which the taxpayer relies include assertions as to some individual’s state of mind (e.g. ‘I thought I had filed the required return’, or ‘I did not believe it was necessary to file a return in these circumstances’), the question of whether that state of mind actually existed must be decided by the FTT just as much as any other facts relied on. In doing so, the FTT, as the primary fact-finding tribunal, is entitled to make an assessment of the credibility of the relevant witness using all the usual tools available to it, and one of those tools is the inherent probability (or otherwise) that the belief which is being asserted was in fact held… 73. Once it has made its findings of all the relevant facts, then the FTT must assess whether those facts (including, where relevant, the state of mind of any relevant witness) are sufficient to amount to a reasonable excuse, judged objectively. 74. Where a taxpayer’s belief is in issue, it is often put forward as either the sole or main fact which is being relied on – e.g. “I did not think it was necessary to file a return”, or “I genuinely and honestly believed that I had submitted a return”
“It is important to appreciate that FTT did give reasons for the conclusion they reached. They believed Mr Munn. He was in their view a 'totally credible witness'. There is no point in asking this Tribunal to reach a different conclusion and reject Mr Munn's evidence unless there are grounds that would enable this Tribunal to do so. The FTT saw Mr Munn give evidence, they heard him give evidence and they watched him being cross-examined. They accepted his testimony as being truthful.”