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1st Dec 2021
VAT Consultant vatadvice.org
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A most bizarre FTT decision.

It concerned an arrangement between Canterbury Christ Church University (CCCU) and Polo Farm Sports Club (PFSC) in relation to the joint development of a new indoor sports centre. There was evidently some discussion to make the arrangement VAT efficient. Lawyers and a VAT Consultant were appointed, although the Tribunal commented that the Appellant (PFSC) chose not to follow the VAT Consultant’s recommendation (para 52) – never a good idea!

You have to find the agreed Statement of Facts at the end of the decision for the relevant legal matter. The key question to be determined was whether PFSC had granted a lease to CCCU. Since PFSC had opted to tax the property, presumably to secure input tax recovery, and amount received from CCCU (nearly £2m) was properly subject to output tax. PFSC tried to argue that there was no supply, specifically no lease, so no output tax was due. This seemed a simple matter. This is stated at para 87. HMRC had taken a different view, issuing an assessment for around £300,000.

The decision starts by commenting that their representative’s arguments were “at times incomprehensive to both us and HMRC and which were not inherently consistent” The decision returns several times to quite strong criticism of the appellant’s representative, an Accountant. It is not clear whether he is (was) employed by either party, or qualified. The decision also refers to repeated failures by the same person to comply with previous Tribunal Directions. He failed to understand the difference between evidence, opinion, assertion, and what is admissible before the Tribunal (para 42).

On the facts as I understand them, I am not sure the appellant ever had a case that could succeed. But surely more professional representation would have assisted!

www.bailii.org/uk/cases/UKFTT/TC/2021/TC08294.html

 

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By Paul Crowley
01st Dec 2021 22:04

Agree that it is a good idea to follow the advice of the person that knows

Better still is to spend 5 minutes on the telephone to HMRC and claim that they said it was all OK and the non profit was following HMRC telephone guidance

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