In Flying Spur Limited v HMRC [2022] TC08360, the First Tier Tribunal (FTT) refused permission for a late appeal against HMRC’s cancellation of a company’s VAT registration.

  • Flying Spur Limited (FSL) commenced trading in January 2013 running an Ofsted-regulated children’s home in Norfolk, supplying its services to local authorities.
  • FSL’s sole director, Mr Rapley, contacted HMRC’s VAT helpline in June 2012 in anticipation of starting the business. He was directed to VAT Notice 701/2 (Welfare) and advised that:
    • Care provided in a children’s home was on a list of Exempt services.
    • The children’s home would not register for VAT or charge VAT to its customers.
  • In October 2013, FSL submitted an Online VAT registration application stating that VAT registration was not Voluntary and that the company intended to make taxable supplies in the future.
    • HMRC processed the application and FSL became VAT registered from 1 November 2013.
    • FSL was made aware that if it no longer intended to make taxable supplies, it should notify HMRC within 30 days of the change.
  • In April 2015, HMRC wrote to FSL explaining that as its only income was from VAT exempt State-regulated welfare services, it was not eligible to be registered for VAT.
  • HMRC cancelled FSL’s VAT registration in September 2015.
  • In May 2017, Mr Rapley wrote a letter of complaint to the Adjudicator’s Office.
    • The Parliamentary and Health Service Ombudsman replied in June 2018 advising that Mr Rapley’s complaint would be better dealt with by the court and so would not be considered further.
  • After further correspondence, letters in April 2019 to Mr Rapley’s MP from the chief executive and permanent secretary of HMRC advised that:
    • HMRC had exhausted their complaints process.
    • If Mr Rapley was still unhappy he should appeal to the Tribunal, explaining why the appeal was late.
  • FSL finally Appealed to the First Tier Tribunal (FTT) in May 2019.

The FTT refused permission for the Late appeal, finding it to be 3.5 years late: a significant and serious delay.

  • There was an absence of good reasons for the delay and the FTT placed particular importance on respecting statutory time limits for appeal: 30 days in this instance.
    • In March 2019, HMRC had given FSL warning of intended winding up action in respect of an £88,000 debt (which was not subject to the appeal). This was the apparent reason for changing tack and appealing to the FTT in May 2019.

The FTT went on to consider what its decision would have been, had the late appeal been allowed:

  • While FSL was Registerable in November 2013 on the basis of intending to make taxable supplies, the only supplies it subsequently made were exempt.
    • In September 2015, HMRC was justified in being satisfied that FSL was no longer registrable. HMRC had the power to cancel FSL’s VAT registration.
  • There was nothing to impugn HMRC’s decision to use their powers to cancel FSL’s VAT registration. For that reason, the FTT would have dismissed the appeal had it not been refused on grounds of lateness.


This case serves as a useful reminder for taxpayers and advisers that in order to register for VAT, a person must either make or intend to make, taxable supplies.

Where a person disagrees with HMRC’s decision to cancel a VAT registration, s.83(1)(a) VATA 1994 allows an appeal to be made to the Tribunal within 30 days.

Where appeals are made after 30 days, the Tribunal must give permission to appeal. In doing so, it will consider the three-stage process set out in Martland v HMRC. See Appeals: Late

Useful guides on this topic

Health and welfare: VAT
Reduced rating, zero-rating and VAT exemption can apply to various services relating to medical care, health and welfare. This guide looks at supplies of medicines, supplies of goods and building works to disabled persons and charities, medical care, and welfare services.

Registering for VAT
When should a business register for and charge VAT? What are the VAT registration limits and VAT rules after Brexit? What penalties might HMRC issue for late notification of registration?

Is voluntary VAT registration worthwhile?
When can a business voluntarily register for VAT? When would it be beneficial to voluntarily register?

How to appeal an HMRC decision
Disagree with an HMRC decision? How to appeal, what type of decision can you appeal and what are your different options when you disagree with HMRC? What are the key steps in making an appeal?

Appeals: Late
When can you make a late tax appeal? What conditions must be met?

Partial exemption & input VAT
How do you calculate the amount of input tax you can recover under the VAT partial exemption rules? What are the de minimis rules?

External link

Flying Spur Limited v HMRC [2022] TC08360

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