In Dollar Financial UK Ltd v HMRC  UKUT 00256, the Upper Tribunal (UT) found that the First Tier Tribunal (FTT) was correct to strike out an appeal seeking to backdate membership of a VAT group. No valid application had been made and there was no appealable decision.
- In June 2013, Dollar Financial UK Ltd (DFUK) applied for its US parent company to join its VAT Group with immediate effect. HMRC approved the application.
- In 2016, DFUK asked for the admission of its parent to the VAT group to be backdated to July 2012, being the date that the US parent acquired a UK Permanent establishment and, therefore, the date that it should have Registered for VAT.
- DFUK did not seek to separately register the US company for UK VAT.
- If the backdating request was allowed, it would have meant that DFUK should not have accounted for VAT of £2.2 million under the Reverse charge on Management services provided by the US company.
- DFUK made a Repayment claim for this amount.
- HMRC rejected the request for VAT group backdating. This position was upheld on Statutory Review.
- DFUK appealed to the First Tier Tribunal (FTT), which struck out the appeal. DFUK Appealed to the Upper Tribunal (UT).
The UT found that:
- The FTT was correct to conclude that no valid application to backdate VAT grouping was made under s.43B VATA 1994, and no such application could validly have been made.
- Had there been a valid application, as HMRC did not refuse it within 90 days, the legislation would have deemed such an application to have been granted with effect from HMRC’s receipt of it in September 2016.
- As the parent company was already a member of the VAT group in September 2016, a valid application would have had no legal effect.
- The decision given by HMRC related only to VAT grouping and was not a decision about the VAT registration of the US parent company.
- The FTT was correct to find that it lacked jurisdiction: there was no right of appeal under s.83 VATA 1994.
The appeal was dismissed.
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