Someone recently bought our

students are currently browsing our notes.


Investment Trust Companies V. Hmrc Notes

BCL Law Notes > Commercial Remedies BCL Notes

This is an extract of our Investment Trust Companies V. Hmrc document, which we sell as part of our Commercial Remedies BCL Notes collection written by the top tier of Oxford students.

The following is a more accessble plain text extract of the PDF sample above, taken from our Commercial Remedies BCL Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:

INVESTMENT TRUST COMPANIES V. HMRC FACTS An end customer of goods or services has for many years been charged VAT at the standard rate by the supplier of those goods or services. The customer has paid the VAT, and the supplier has duly accounted for it as output tax to HMRC (a term which I will use to include their statutory predecessors, the Commissioners for HM Customs and Excise). It then transpires, as a result of a ruling by the Court of Justice of the European Union ("the ECJ"), that the supplies in question have at all material times been exempt, with the consequence that the VAT was unlawfully charged. To the maximum extent permitted by UK domestic law, the supplier then recovers from HMRC the VAT which it has overpaid, and passes on the benefit of that recovery to the customer. There are two reasons, however, why the supplier may be unable to recover from HMRC the full amount of the unlawful VAT paid by the customer. The first reason is the statutory three year limitation period applicable at the material time to claims by a taxable person to recover overpaid VAT from HMRC. The second reason is that the supplier will have paid to HMRC in the first place only a net amount representing the difference between the output tax on the supply to the customer and any associated input tax incurred by the supplier. The amount of the overpaid tax which the supplier can recover from HMRC, and thus pass on to the customer, is therefore confined to the net amount of tax which the supplier has actually paid to HMRC, as well as being subject to the three year limitation period. Particular Facts: Before going into liquidation, each of the investment trusts carried on the business of investing funds subscribed by the public in various asset portfolios, with a view to obtaining capital and/or income returns. As I have already said, the Managers supplied investment management services to the claimants, in return for fees on which VAT was charged and paid at the standard rate. The Manager was often, but not always, a company associated with the investment trust. QUESTION In these circumstances, the question arises whether the end customer, who has borne the full economic burden of the unlawful VAT, can bring a direct claim against HMRC to recover the balance of the tax which it paid to the supplier. HOLDING Difference between statutory obligation of supplier and contractual obligation of consumer

Buy the full version of these notes or essay plans and more in our Commercial Remedies BCL Notes.

More Commercial Remedies Bcl Samples