Touchwood Services Ltd v Revenue and Customs

An appeal to the VAT and Duties Tribunal requires a prior decision by the Commissioners which is adverse to the taxpayer and relates to an amount or other matter within VAT Act 1994, section 83. A continuing investigation, or a decision to defer a decision, is not itself appealable. A provisional or without-prejudice repayment does not amount to a final refusal of the balance claimed. Section 83(c) concerns an ascertained or ascertainable amount of input tax, not merely a general liability to repay. Judicial review may provide an effective remedy against unreasonable delay while the statutory appeal jurisdiction has not arisen.

Touchwood Services Ltd made a voluntary disclosure claiming repayment of overpaid VAT. The Commissioners paid part of the claim provisionally but continued enquiries concerning the validity and existence of the goods supporting the input-tax claim.

Touchwood appealed to the VAT and Duties Tribunal, treating correspondence from the Commissioners as a refusal or decision concerning the unpaid balance. The Tribunal upheld a rule 6 application and struck out the appeal under rule 18(1)(a) of the Value Added Tax Tribunal's Rules 1986. Touchwood appealed to the High Court, contending that an appealable decision had arisen under section 83(c) or section 83(p) of the VAT Act 1994.

1. The appeal was dismissed. The Tribunal had not erred in law in striking out the appeal.

2. An appeal under section 83 presupposes a prior decision or resolution by the Commissioners which is adverse to the taxpayer. Under section 83(c), that decision must concern the amount of input tax which may be credited. A mere dispute or unresolved issue is insufficient.

3. The Commissioners' payment of £152,415 was expressly provisional and without prejudice. Read with the surrounding correspondence, it was not a final decision refusing the balance of the voluntary disclosure. Treating provisional assistance as an appealable refusal would discourage interim payments contemplated by Garage Molenheide BVBA & Ors v Belgium [1998] STC 126.

4. The correspondence in January 2006 stated that the Commissioners remained unable to decide the repayment claim while enquiries continued. A decision to defer a decision was not itself a decision falling within section 83(c) or section 83(p).

5. Section 83(p) was inapplicable. No assessment under section 73 or section 75 had been shown. Following Tricell United Kingdom Ltd v Commissioners of Customs & Excise, Decision 18127, a statement that a greater sum is due from Customs than is due to Customs is not an assessment under section 73(1).

6. The availability of judicial review, including possible disclosure, cross-examination and appropriate interim relief, meant that the domestic system could satisfy the effective-remedy requirements identified in Garage Molenheide BVBA & Ors v Belgium. Whether the Commissioners' delay was unreasonable was not an issue for determination on this appeal.

The Tribunal upheld the Commissioners' rule 6 application and struck out Touchwood's appeal. The High Court dismissed Touchwood's appeal against that decision.