HM Revenue & Customs v Mobilx Ltd

An appeal under section 83(c) of the Value Added Tax Act 1994 requires a prior decision by HMRC concerning the amount of input tax creditable to the taxpayer. A continuing investigation, an unresolved issue, or a failure to notify a decision does not itself create an appealable matter. The Tribunal’s jurisdiction is directed to an adverse decision or resolution sufficiently related to an ascertained or ascertainable amount of input tax. Judicial review may provide a remedy for delay. Once HMRC makes a decision refusing repayment, the taxpayer may appeal that decision, but an earlier purported appeal cannot be adjudicated upon.

Mobilx claimed repayment of input tax for two VAT periods while HMRC investigated transactions connected with carousel fraud. Before HMRC had decided whether to repay the claims, Mobilx issued notices of appeal under section 83(c) of the Value Added Tax Act 1994, alleging that HMRC had failed to notify a decision.

The VAT and Duties Tribunal declined to strike out the appeals. It held that an issue between the taxpayer and HMRC was sufficient to found jurisdiction. HMRC appealed to the High Court. By the time of the appeal, HMRC had refused the repayment claims, giving Mobilx a possible route of appeal against those decisions. The central issue was whether a prior HMRC decision was required before Tribunal jurisdiction arose.

1. Appeals allowed. The Tribunal’s decision was wrong in law and Mobilx’s purported appeals were struck out.
2. Section 83(c) of the Value Added Tax Act 1994 is an appeal provision. In its context, an appeal presupposes a prior decision or resolution by HMRC which is wholly or partly adverse to the taxpayer and concerns the amount of input tax which may be credited.
3. A general dispute about HMRC’s liability to repay, a continuing investigation, or an unresolved issue between HMRC and the taxpayer is insufficient. The relevant decision must relate to an ascertained or ascertainable amount of input tax.
4. The court followed Touchwood Services Limited v HMRC [2007] EWHC 105 Ch, in which Lindsay J held that a disappointed party cannot appeal merely on an issue falling short of a decision by HMRC. The judge considered that decision clearly correct.
5. The complaints in Mobilx’s notices concerned HMRC’s failure to notify a decision. They therefore did not relate to any decision capable of appeal under section 83(c). HMRC’s subsequent refusal decisions gave Mobilx a right to bring appeals against those decisions, but did not validate the existing purported appeals.
6. The wording of section 40(c) of the Value Added Tax Act 1983, the statutory predecessor, was consistent with the same conclusion. The judge left open whether a dispute of law, without figures having been addressed, could itself found jurisdiction.

• High Court (Chancery Division): HMRC’s appeals from the VAT and Duties Tribunal were allowed. Mobilx’s appeals to the Tribunal were struck out.
• VAT and Duties Tribunal: The Tribunal had declined HMRC’s applications to strike out the appeals and held that an issue concerning input tax was sufficient to found jurisdiction.