lexisnexis confidential the good, the bad, and the downright stupid mike truman llb cta (fellow) fca...
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LexisNexis Confidential
The good, the bad, and the downright stupid
Mike Truman LLB CTA (Fellow) FCA
Editor, Taxation magazine
2
Fleming / Conde Nast facts
• Fleming managed to reclaim VAT on cars ten years later
• Conde Nast had a claim for staff entertainment backdated to 1973
• 3 year cap had been introduced by SI 1995/2518
• House of Lords asked to find that it had been incorrectly brought in and could not apply
3
Fleming and Conde Nast
• Three year time limits not valid
• Insufficient publicity had been given to the ‘administrative action’
• Business Briefs disseminate information but do not change the legal system
• Put in repayment claims for last 23 years…
4
Marks & Spencer
• The long running saga of the chocolate teacakes…
Chocolate biscuit base(standard rated)
=
Marshmallow (standard rated)
+
Chocolate (standard rated)
+
Chocolate covered teacake(zero rated)
And sold alongside the biscuits…
5
M&S snakes and ladders
VAT Tribunal
Court of Appeal
House of Lords
ECJ
High Court
Teacakes UE 1996
Cap & UE both 1999
Teacakes cap & vouchers both 1997
Cap & UE both 1998
Vouchers (part) cap only
Broad reply
Cap dropped, UE only
UE, for M&S
UE
6
Marks & Spencer
• If VAT has been applied at the standard rate incorrectly, fiscal neutrality means it must be repaid
• Cannot apply unjust enrichment to payment traders but not repayment traders
• Claims needed!
7
FA 2008 change
• Cap cannot apply to entitlements arising before:
• 4 December 1996 in respect of output tax overpaid and
• 1 May 1997 in respect of input tax incurred and under-recovered
• IF claim made by 1 April 2009
8
Drummond
• Bought five second-hand life policies for £1.96 million
• Surrender value only £1.75 million
• Surrendered them to get a life assurance gain of £1,300
• But then claims surrender value ‘taken into account’ in computing income charged to tax
• So should be excluded from CGT computation, and there is a £1.96m loss!
9
Two arguments
• Should surrender value be excluded, as argued?
• Should acquisition cost be excluded as not wholly or exclusively?
• Special Commissioner said yes to both, as scheme entirely pre-ordained
–which would have meant a GAIN of £1.75 million!
• High Court said yes to first, but no to second except for the excess over surrender value
10
Mr A
• Enquiry opened 9 August
• Agent tells Inspector 15 August that A is having surgery and chemotherapy
• HMRC say they will extend deadline–… to 2 October
–and they will very kindly drop round to pick the information up from Mr A’s house
• Further disputes, 19A notice issued 13 November
11
Notice set aside
• Set aside by the Special Commissioner, but said HMRC had acted reasonably
• Agent has been ‘busy’ when called–can we make the same complaint when calling HMRC?
• Had now undertaken not to call for interview until March 2008 at the earliest
• Documents would be collected from agent’s premises
12
Martin
• Originally told he could not have a CIS6 based on previous unincorporated turnover
• Not noticed that he had not signed his application
• Within the HMRC office it got turned into an application for a CIS4 net payment card
• Claimed damages initially under COP1
• But eventually as breach of a duty of care
13
Duty of care
• Statutory provision to issue a certificate did not suggest any damages
• Judge says that there is no indication parliament intended to provide one
• Common law duty of care would rarely be implied in the absence of a statutory one
• But there was a vicarious duty of care in respect of the forms being changed
14
Emms
• Rugby prop forward, has to maintain his fitness and bulk
• Claims cost of extra food plus supplements
• Not exclusively and necessarily, would not be required by all players, too much choice
• Why don’t they have ‘staff canteens’ and medical provision by the club doctors?
15
Pringles
• … are not crisps…!
• Have to be both made from potato–including flour, starch etc
• And similar to crisps
• Pringles made from 42% potato but 15% other flour as well
• And not similar in shape, packaging etc
16
Stackers v Pringles
Potato flour/starch
Other flours
Distinctive shape
Stackable
‘Melt in the mouth’
Stackers Pringles
? ?
17
Lee Barrett
• Claimed he had left for a year before 6 April 1998
• But even on his figures he had been in the UK some days
• However his bank records showed that he had been in the UK for more
–and had not left before 6 April as his ‘diary’ showed
• If you are going to become non-resident you’ve got to do it properly!
18
Lee Barrett map
Cash 6/4 Meal 6/4Groceries 7/4
Groucho 9/4
Cash 14/4Cash20/4
Car park 20/4
19
Distinct break
• Continued in employment, doing same work
• No permanent home or HQ abroad
• Family stayed in UK
• No overseas bank account(?), driving licence, doctor, etc
• Centre of interests still in UK
• No ticket stub or boarding pass
LexisNexis Confidential
Thank you for listening- safe journey home
Mike Truman LLB FCA CTA (Fellow)
Editor, Taxation magazine
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