20681
 VAT – three year cap on repayment claims – cannot be disapplied for individual circumstances – appeal dismissed.

	
MANCHESTER TRIBUNAL CENTRE 			   

 
 	
	A RUSSELL HEATING	Appellant

	- and -

THE COMMISSIONERS FOR
	HER MAJESTY’S REVENUE AND CUSTOMS	Respondents

Tribunal:	Richard Barlow (Chairman)	
		Alban Holden (Member)

Sitting in public in Manchester on 14 February 2008.

Mr A Russell (partner) for the Appellant

Mr Jonathan Cannan, counsel, instructed by the Solicitor for HM Revenue and Customs for the Respondents 

© CROWN COPYRIGHT 2008
DECISION
1.	The appellant is a partnership of Mr Russell and his wife and they appeal against a refusal by the respondents to make a repayment under section 80 of the Value Added Tax Act 1994 of £6076.64 which the respondents admit was overpaid as value added tax in the periods ending May 2003, August 2003 and November 2003.  The respondents’ refusal to repay those sums is based on their contention that the claims for repayment of the overpayments were made more than three years after the relevant date as prescribed by section 80 of the Act.

2.	We heard evidence from Mr Russell and accept it as being entirely truthful.  He produced a good deal of correspondence and other documents which fully corroborated his oral evidence and indeed Mr Cannan on behalf of the commissioners did not challenge that evidence.

3.	The overpayments came about in the following way.  For the first two of the three periods in question the appellant partnership had failed to submit properly completed VAT returns and paid what can best be described as sums estimated by Mrs Russell who was looking after the VAT side of the business and in respect of the third of those periods no return was submitted and the appellants received what is known as a centrally issued assessment which was issued automatically when the trader failed to submit the return on time.  The appellants paid those estimated sums and the assessment but did nothing about seeking to correct the figures by submitting accurate returns.  Subsequently, when a Customs Officer visited the appellants, it transpired that the appellants should have been making repayment claims for those three periods so that they had overpaid tax by more than the amounts declared and assessed and that is not disputed by the respondents.  In fact, it appears the Customs Officer worked out the amounts for the appellants and a larger amount was repaid for later periods as a result of the officer’s visit.

4.	This state of affairs came about because of a number of problems encountered by the appellants in their personal and family lives.  We need not go into detail save to say that the problems were of a most tragic and overwhelming nature and that it was not surprising in light of those circumstances that the appellants had been unable to attend properly to their VAT affairs at the relevant time.

5.	The corrected VAT returns were completed by a Customs Officer on a visit to the appellants on 26 March 2007 and it seems the respondents treated that as a request for repayment, certainly no earlier document has been produced that could have amounted to a claim and we are satisfied that none exists because Mr Russell agreed that he and his wife had done nothing to correct the situation before the officer’s visit.  That request for repayment was refused because of the three year limit on making claims.

6.	Section 80(4) of the VAT Act in the form it has taken since 26 May 2005 and therefore the form it took on 26 March 2007 reads:

“(4) The commissioners shall not be liable on a claim under this section-

(a) to credit an amount to a person under subsection (1) or (1A) above, or 
(b) to repay an amount to a person under subsection (1B) above, 

	if the claim is made more than three years after the relevant date.”

7.	The claims in respect of the first two periods in issue relate to amounts that could have been credited under subsection (1) and the claim in respect of the third period could have been repaid under subsection (1A).

8.	The respondents contend that the relevant date is three years after the end of the prescribed accounting period by reason of subsection (4ZA) paragraph (a) in respect of the first two periods and paragraph (d) in respect of the third period and we agree that is correct.

9.	It follows that the claims in question were made outside the three year limit applicable and can de disallowed under section 80.  The tribunal cannot alter the correct legal position on the basis of individual circumstances. The tribunal has previously decided in a case called I and C van Colle (decision 20332) that tragic circumstances do not provide a reason for circumventing the time limit set by section 80 and we agree that is the case.  Legislation cannot be disapplied on grounds of hardship or exceptional circumstances except so far as that is provided for within the legislation, which is not the case in section 80.

10.	This case is not one to which the principles set out by the House of Lords in Fleming –v- Revenue and Customs Commissioners [2008] STC 324 apply.  That case concerned the situation where a taxpayer with an existing right to claim a repayment would have lost it because of the retrospective effect of the three year limit when it was first introduced but this case is one where the three year limit was already in place before the appellants’ claim arose.

11.	We must accordingly dismiss the appeal although we would like to add our expression of sympathy to the appellants to those already expressed at the hearing by Mr Cannan for the very sad circumstances in which they found themselves.

Richard Barlow
CHAIRMAN
Release Date: 14 May 2008

MAN/07/0754