Value Added Tax Act 1994, section 85

Settling appeals by agreement

Part V Reviews and Appeals

(1)Subject to the provisions of this section, where a person gives notice of appeal under section 83 and, before the appeal is determined by a tribunal, [F821HMRCF821] and the appellant come to an agreement (whether in writing or otherwise) under the terms of which the decision under appeal is to be treated—

(a)as upheld without variation, or

(b)as varied in a particular manner, or

(c)as discharged or cancelled,

F822the like consequences shall ensue for all purposes as would have ensued if, at the time when the agreement was come to, a tribunal had determined the appeal in accordance with the terms of the agreement ....

(2)Subsection (1) above shall not apply where, within 30 days from the date when the agreement was come to, the appellant gives notice in writing to [F821HMRCF821] that he desires to repudiate or resile for the agreement.

(3)Where an agreement is not in writing—

(a)the preceding provisions of this section shall not apply unless the fact that an agreement was come to, and the terms agreed, are confirmed by notice in writing given by [F821HMRCF821] to the appellant or by the appellant to [F821HMRCF821] , and

(b)references in those provisions to the time when the agreement was come to shall be construed as references to the time of the giving of that notice of confirmation.

(4)Where—

(a)a person who has given a notice of appeal notifies [F821HMRCF821] , whether orally or in writing, that he desires not to proceed with the appeal; and

(b)30 days have elapsed since the giving of the notification without [F821HMRCF821] giving to the appellant notice in writing indicating that they are unwilling that the appeal should be treated as withdrawn,

the preceding provisions of this section shall have effect as if, at the date of the appellant’s notification, the appellant and [F821HMRCF821] had come to an agreement, orally or in writing, as the case may be, that the decision under appeal should be upheld without variation.

(5)References in this section to an agreement being come to with an appellant and the giving of notice or notification to or by an appellant include references to an agreement being come to with, and the giving of notice or notification to or by, a person acting on behalf of the appellant in relation to the appeal.

Definitions used in section 85 5

tribunal

In this Act “tribunal” means the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal.

Defined in s.82 · see it in the full Act

“tribunal” has the meaning given by section 82;

Defined in s.96(1) · see it in the full Act
HMRC

“HMRC” means Her Majesty’s Revenue and Customs;

Defined in s.96(1) · see it in the full Act
subsection (1) above

(a) the reference in subsection (2) to “subsection (1) above” were to “subsection (1) and paragraph 24(1) of Schedule 9ZA”;

Defined in Sch.9ZA para.24(2) · see it in the full Act

(b) the reference in subsection (2A) to “subsection (1) above” were to “subsection (1) or paragraph 24(1) of Schedule 9ZA”.

Defined in Sch.9ZA para.24(2) · see it in the full Act
the preceding provisions of this section

(6) Section 7 has effect as if the references in subsections (5A) to (7) to “the preceding provisions of this section” included sub-paragraphs (1) and (2) of this paragraph.

Defined in Sch.9ZB para.29(6) · see it in the full Act
notification

“notification” means written notification, and

Defined in Sch.10 para.34(1) · see it in the full Act

Cases considering section 85 8

Customs & Excise v DFS Furniture Company Plc

[2002] EWCA Civ 1708 · 6 December 2002Interprets

Section 85 gives statutory effect to an agreement settling a VAT appeal, but only where the parties have actually come to such an agreement. The court held that no agreement arose because there was no offer and acceptance and the payment resulted from administrative policy. (see judgment discussion) Section 85(1) was construed as requiring an agreement under which the decision under appeal is treated as upheld, varied, discharged or cancelled. No such agreement was reached on the facts. (see judgment discussion) The court held that the section 85(3) confirmation issue did not arise because there was no underlying agreement to settle the appeal. (see judgment discussion)

Telent Technology Services Limited v The Commissioners for HMRC

[2024] UKUT 183 (TCC) · 20 June 2024Interprets

Section 85(1) gives the deemed agreement on withdrawal the consequences which would follow from a tribunal determination, for all purposes. The deemed determination rejects grounds actually advanced in the withdrawn appeal, not merely the assessment debt. This supported issue estoppel. (see paras [62]-[70]; [73]) A taxpayer’s notice withdrawing an appeal triggered the statutory deeming that the parties had agreed that the assessment be upheld without variation. Read with section 85(1), this prevented re-litigation of the grounds of the withdrawn appeal. (see paras [49]-[50]; [62]-[70])

Cambria Automobiles (South East) Limited & Anor v The Commissioners for HMRC

[2023] UKUT 249 (TCC) · 13 October 2023

Section 85 gives an agreement settling an appeal the consequences of a tribunal determination in accordance with its terms. Construing the agreement objectively, the Tribunal held that it finally settled the relevant overpayments and precluded the 2009 claims. (see paras [55]-[57]; [79]; [82]-[84])

What each judgment says about section 85 is in the case-law panel in the full Act.

Amendments and notes

18 notes from legislation.gov.uk

Amendments

  1. F821Word in s. 85 substituted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 222(3)
  2. F822Words in s. 85(1) omitted (1.4.2009) by virtue of The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 222(2)

Modifications

  1. C75S. 85 amended (28.7.2000) by 2000 c. 17, s. 30, Sch. 6 para. 123(7)
  2. C76S. 85 extended (29.4.1996) by 1996 c. 8, s. 57(a)
  3. C77S. 85 modified (27.11.2003) by Finance Act 2003 (c. 14), ss. 24(7), 37(1); S.I. 2003/2985, art. 2
  4. C78S. 85 modified (23.12.2003) by Export (Penalty) Regulations 2003 (S.I. 2003/3102), regs. 1, 13(1)
  5. C79S. 85 modified by 1994 c. 9, s. 60(10) (as substituted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 207(12))
  6. C80S. 85 modified by 1994 c. 9, s. 16(3B) (as inserted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 203(6))
  7. C81S. 85 applied (with modifications) by 2008 c. 28, Sch. 7 para. 26(6) (as substituted (1.4.2009) by The Revenue and Customs Appeals Order 2009 (S.I. 2009/777), art. 1, Sch. para. 2(4))
  8. C82S. 85 modified by S.I. 2007/1509, reg. 5 (as substituted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 2 para. 165)
  9. C83S. 85 modified by S.I. 2003/3102, reg. 13 (as substituted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 2 para. 126)
  10. C84S. 85 modified by 2003 c. 14, s. 37 (as substituted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 366)
  11. C85S. 85 modified by 1996 c. 8, s. 56(8) (as substituted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 237(8))
  12. C86S. 85 modified by 2000 c. 17, Sch. 6 para. 123(7) (as substituted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 291(9))
  13. C87S. 85 modified by 2001 c. 9, s. 42(7) (as substituted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 306(9))
  14. C88S. 85 modified (20.2.2019) by The Customs Safety and Security (Penalty) Regulations 2019 (S.I. 2019/121), regs. 1, 15
  15. C89S. 85 modified (10.12.2021 for specified purposes, 1.4.2022 in so far as not already in force and with effect in accordance with s. 85(1)(b) of the amending Act) by Finance Act 2021 (c. 26), s. 85(1)(a), Sch. 11 para. 12(4); S.I. 2021/1409, regs. 3, 4
  16. C90S. 85 applied (with modifications) (with effect in accordance with s. 158 of the amending Act) by Finance Act 2026 (c. 11), s. 158, Sch. 17 para. 59