“By Ground 1 (paragraphs 14-16 and 19 of the Grounds of Appeal), the Appellant challenges HMRC’s refusal to permit its entitlement to deduct input VAT on the basis that it does not “hold a document authenticated or issued by the proper officer”
“(6) Regulations may provide— (a) for VAT on the supply of goods or services to a taxable person, VAT on the acquisition of goods by a taxable person from other member States and VAT paid or payable by a taxable person on the importation of goods from places outside the member States to be treated as his input tax only if and to the extent that the charge to VAT is evidenced and quantified by reference to such documents or other information as may be specified in the regulations or the Commissioners may direct either generally or in particular cases or classes of cases;”
“(2) At the time of claiming deduction of input tax in accordance with paragraph (1) above, a person shall, if the claim is in respect of— … (c) an importation of goods, hold a document authenticated or issued by the proper officer, showing the claimant as importer, consignee or owner and showing the amount of VAT charged on the goods; … provided that where the Commissioners so direct, either generally or in relation to particular cases or classes of cases, a claimant shall hold or provide such other ... evidence of the charge to VAT as the Commissioners may direct.”
“In so far as the goods and services are used for the purposes of the taxed transactions of a taxable person, the taxable person shall be entitled, in the Member State in which he carries out these transactions, to deduct the following from the VAT which he is liable to pay: … (e) the VAT due or paid in respect of the importation of goods into that Member State.”
“In order to exercise the right of deduction, a taxable person must meet the following conditions: … (e) for the purposes of deductions pursuant to Article 168(e), in respect of the importation of goods, he must hold an import document specifying him as consignee or importer, and stating the amount of VAT due or enabling that amount to be calculated;”
“(1) A person who has made a Customs declaration is entitled to amend or withdraw it at any time before a relevant event occurs. (2) For this purpose “a relevant event occurs” on the first occurrence of any of the following— (a) an HMRC officer indicating to the person that the officer intends to take steps to verify the declaration, (b) an HMRC officer taking steps to verify the declaration, and (c) HMRC accepting the declaration.” (a) an HMRC officer indicating to the person that the officer intends to take steps to verify the declaration, (b) an HMRC officer taking steps to verify the declaration, and (c) HMRC accepting the declaration.”
“Once a relevant event occurs, the person making the declaration may amend or withdraw it only if— (a) a notification to amend or withdraw the declaration is given to an HMRC officer before the end of a period specified in a public notice given by HMRC Commissioners, and (b) an HMRC officer consents to the making of the amendment or the withdrawal.” (a) a notification to amend or withdraw the declaration is given to an HMRC officer before the end of a period specified in a public notice given by HMRC Commissioners, and (b) an HMRC officer consents to the making of the amendment or the withdrawal.”
“2.3 Who can reclaim import VAT as input tax Subject to the normal rules, you can claim as input tax any import VAT you pay on goods, provided those goods are imported for the purpose of your business. Your claim must normally be made on the VAT Return for the accounting period during which the importation took place. The normal evidence of payment of import VAT is the import VAT certificate (form C79), which is issued monthly. Section 8 gives more information about the C79, as well as the acceptable evidence for those types of importation that at present do not appear on a C79. It also explains what to do if you lose a certificate or have any queries about items missing from certificates. …. 8.2 What an import VAT certificate is You need to hold official evidence of VAT paid on imported goods before you can recover the VAT as input tax. The normal evidence is the monthly certificate, known as form C79. It does not in itself allow you to claim back the VAT you have paid which must, in all cases, be deductible under the normal input tax rules. We send the certificates (form C79) to the VAT, EORI-registered person whose VAT registration number is shown in box 8 of the import declaration. You must take great care to use the correct EORI number. If not, the VAT you have paid may not appear on your certificate and may even end up on another person’s certificate. Similarly, you may find someone else’s import VAT on your certificate. We will take action against agents, importers who persistently quote incorrect EORI numbers. This may include prosecution.”
“Where an appeal is against an HMRC decision which depended upon a prior decision taken ... in relation to the appellant, the fact that the prior decision is not within section 83 shall not prevent the tribunal from allowing the appeal on the ground that it would have allowed an appeal against the prior decision.”
“(2) The Tribunal must strike out the whole or a part of the proceedings if the Tribunal— (a) does not have jurisdiction in relation to the proceedings or that part of them;”
“The proper task before the FTT was not to identify potentially non-fanciful arguments that jurisdiction might exist. The task was to determine whether jurisdiction did or did not exist; if it did, the application on that ground would inevitably be refused, and if it did not it would inevitably be granted.” (2) It would be wrong to investigate the underlying facts and merits of Ground (1) and the reasons why a C79 import certificate was not issued. The question for the tribunal is whether section 83(1) VATA allows a taxpayer to appeal the fact that a C79 was not issued to it by HMRC. The reasons why a C79 were not issued in this, or any other case, are irrelevant to the question of jurisdiction. (3) The Tribunal is a creature of statute. Section 83(1) VATA contains an exhaustive list of the Tribunal’s jurisdiction and does not allow ICL to challenge the fact a C79 import certificate was not issued to it by HMRC. (4) As a general rule, the Tribunal does not have a supervisory jurisdiction. Even though section 83(1)(c) refers to decisions “with respect to” the amount of input tax, HMRC v Noor,[2013] UKUT 71 (TCC) at [91]-[93], makes it clear that those words do not cover any legal question capable of being determinative of the issue of the amount of input tax which should be attributed to a taxpayer; it is focused on the large number of decisions on rights and obligations under the VAT legislation which HMRC have to make. (5) That said, HMRC accept that the FTT has jurisdiction under section 83(1)(c) to hear an appeal against the exercise of HMRC’s discretion under regulation 29. This is acknowledged in a number of cases, including Noor (at [87]), which comments that: “The FTT has no general supervisory jurisdiction over the decisions of HMRC. That does not mean that under s 83(1)(c) the FTT cannot examine the exercise of a discretion, given to HMRC under primary or subordinate VAT legislation relating to the entitlement to input tax credit, and adjudicate on whether the discretion had been exercised reasonably (see eg Best Buys Supplies Ltd v Customs and Excise Comrs[2011] UKUT 497 (TCC) at [48]–[53],[2012] STC 885 at [48]–[53]—a discretion under reg 29(2) of the VAT Regulations). Although that jurisdiction can be described as supervisory, it relates to the exercise of a discretion which the legislation clearly confers on HMRC. That is to be contrasted with the case of an ultra vires contract or a claim based on legitimate expectation where HMRC are acting altogether outside their powers.”
“We respectfully agree with both judgments [in Marks & Spencer Plc v CCE [1997] VATTR 15302 and Olympia Technology Ltd v HMRC [2006] VATTR 19984], and find that the Tribunal only has jurisdiction if HMRC has made a decision.” (9) A consequence of regulation 29 not conferring any discretion as to whether to issue a C79 import certificate is that no actual decision was made (or could have been made) by HMRC under regulation 29 not to issue ICL with a C79 import certificate. There has thus been no appealable decision falling within section 83(1)(c) VATA 1994 by HMRC not to issue ICL with a C79 import certificate. The appealable decision contained in HMRC’s decision letter dated21 December 2022 was that ICL was out of time to provide the necessary evidence to support a claim for input tax. That appealable decision (that ICL was out of time to provide the necessary evidence to support a claim for input tax) should not be confused with why ICL was not in possession of the evidence that it needed to claim input tax. (10) As ICL has conceded, the Tribunal has no power to order HMRC issue a C79 import certificate and so even if the Tribunal were to decide HMRC were wrong not to have issued one, ICL would still not be able to claim input tax under regulation 29(1)(c). This underscores the lack of jurisdiction. The correct forum to challenge this administrative process (leading to the non-issue of a C79 import certificate) is by way of judicial review where the High Court can make a mandatory order that HMRC issues one. (11) ICL was not without alternative remedy and did not have to resort to judicial review. Notwithstanding the non-issue of a C79 import certificate, ICL had four years to provide “other evidence of the charge to VAT” but failed to do so. HMRC fully accept the Tribunal has jurisdiction to hear the Grounds (2) and (4), which relate to whether ICL is out of time to present such alternative evidence and the exercise of HMRC’s discretion in relation to the same. (12) So far as section 84(10) is concerned HMRC point to Metropolitan International Schools Ltd v HMRC,[2019] EWCA Civ 156 , where the Court of Appeal held that section 84(10) is of a relatively limited scope, being designed as a statutory response to the decision in Customs and Excise Comrs v J H Corbitt (Numismatists) Ltd,[1981] AC 22 , where the House of Lords held that the Tribunal had no power to review HMRC’s exercise of a discretion (not to allow a trader to use a margin scheme) in a way which resulted in the VAT liability against which the trader appealed. Newey LJ (with whom David Richards and McCombe LJJ agreed) observed: “22. In my view, the UT was right that section 84(10) of the VATA is of relatively limited scope. For section 84(10) to apply, the decision under appeal must have “depended upon a prior decision”
"The First-tier Tribunal ('FtT') was created bys. 3(1) of the Tribunals, Courts and Enforcement Act 2007 (hereinafter referred to as 'TCEA'), "for the purpose of exercising the 9 functions conferred on it under or by virtue of this Act or any other Act"
“[T]he original import declaration was completed correctly with ICL’s NL EORI number (NL823256753). We therefore believe that CHIEF should have automatically triggered the generation of the C79 certificate, as the entry was correctly accepted and cleared against entry number: 191-004626P, dated06th April 2017 . … As set out above, we do not believe the original import declaration requires amendment. Based on our previous experience, we understand that HMRC’s PCA team should be capable of generating a C79 certificate through CHIEF post clearance, without amending the original entry, which was finalised in CHIEF.”
“In relation to the April 2017 and September 2020 import transactions, HMRC did not issue respective C79 certificates to ICL at the time of import. We understand that this is because ICL’s freight agents quoted ICL’s Dutch EORI number on the UK import declarations, and at that time (for the reason below) it was not linked to ICL’s UK VAT number. In normal circumstances before Brexit, a Dutch established entity, such as ICL would only have a Dutch EORI number and the NETP’s UK VAT registration number would be linked to that EORI number. This would then result in C79 certificates being automatically issued by HMRC when the NETP (or its agent) completed the import declarations with its Dutch EORI number. As per our letter of30 March 2023 , ICL had correctly linked its UK VAT registration number to its Dutch EORI number. However in October 2015, HMRC incorrectly issued a UK EORI number and linked ICL’s UK VAT registration number to this EORI number, meaning that the UK VAT registration was no longer linked to the Dutch EORI number. This resulted in HMRC not automatically issuing C79 certificates where ICL (or its agent) completed UK import declarations with the Dutch EORI number. ICL had also been issued with a second EORI number by HMRC, but the EU Customs regulations are very clear that a taxpayer can only have one EORI number.”