Bollinway Properties Limited v The Commissioners for HMRC

For repayment supplement purposes, a request for a full set of backing documents may reasonably include the underlying documents evidencing a land transfer, including Land Registry transfer forms. The inquiry need not identify every document specifically. It must relate to the particular repayment claim and must not amount merely to a general investigation. The period excluded from the statutory 30-day period runs until HMRC receives a complete answer. Whether an inquiry is reasonable, and whether it has been completely answered, is fact-sensitive. An appellate tribunal should not interfere with such evaluative findings unless the decision is plainly wrong or no reasonable tribunal could have reached it.

Bollinway claimed a repayment supplement under Value Added Tax Act 1994, section 79, concerning a VAT credit exceeding £71 million arising from its purchase of a property portfolio from Toys “R” Us Properties Limited. HMRC requested a schedule of invoices and a full set of backing documents. Bollinway supplied transaction documents but did not initially supply the TR1 transfer forms.

The First-tier Tribunal dismissed the appeal, holding that the TR1s fell within HMRC’s reasonable inquiry and that 26 days were excluded from the relevant period. Bollinway appealed to the Upper Tribunal, principally challenging the scope and reasonableness of HMRC’s request.

1. Appeal dismissed. The First-tier Tribunal was entitled to conclude that HMRC’s request for a full set of backing documents included the TR1 transfer forms.
2. The inquiry was a specific inquiry into a repayment claim exceeding £71 million, not a general investigation. In context, the request enabled HMRC to establish whether the relevant property supplies had occurred, their value, and the VAT liability. It was therefore reasonable for HMRC to seek the documents evidencing the legal transfers themselves.
3. The reasoning in Customs and Excise Commissioners v L Rowland & Co (Retail) Ltd [1992] STC 647 was applied. The statutory clock stops for the period referable to the raising and answering of a reasonable inquiry, ending when HMRC receives a complete answer. The taxpayer bears responsibility for justifying the repayment claim once the inquiry has been raised.
4. The TR1s were relevant not merely to the time of supply. They were evidence that the transactions had actually occurred and that the claimed VAT credit was due. Although the invoice could establish an actual tax point in some circumstances, the statutory time-of-supply hierarchy under section 6 did not make the transfer documents irrelevant.
5. Whether the request was reasonable and whether the answer was complete involved a fact-sensitive evaluative exercise. Applying the appellate restraint principles stated in Volpi v Volpi [2022] EWCA Civ 464, the Upper Tribunal found no error of law in the First-tier Tribunal’s conclusion. The period from 23 November to 18 December 2018, amounting to 26 days, was properly excluded. HMRC’s instruction was therefore issued within the relevant 30-day period. Grounds 1 and 2 and HMRC’s alternative argument were academic.

• Upper Tribunal (Tax and Chancery Chamber): appeal dismissed. The Tribunal upheld the First-tier Tribunal’s conclusion that HMRC’s inquiry was reasonable and remained unanswered until the TR1s were supplied.
• First-tier Tribunal (Tax Chamber): appeal dismissed in a decision released on 2 September 2021. The tribunal held that the VAT credit had been assigned and, alternatively, that HMRC’s instruction was issued within the relevant period.