Mr Justice Newey, sitting in the Upper Tribunal, dismissed HMRC’s appeal against Southern Cross Employment Agency Limited’s victory in the First-tier Tribunal that HMRC could not resile from an agreement to repay VAT. Mr Justice Newey held that:
Section 80(7) Value Added Tax Act 1994 did not bar HMRC from entering into a binding agreement with Southern Cross. HMRC could enter into such an agreement under their care and management power.
The agreement HMRC entered into was not ultra vires and was not void.
The FtT was entitled to find that a compromise agreement had been formed between Southern Cross and HMRC on the facts and that such finding could not be disturbed.
Both the FtT and the Upper Tribunal have in essence held that although the initial claim for repayment was made under s80 VATA, HMRC had power to enter into a compromise agreement of that claim and the compromise meant that s80(4A) could not bite.
Peter Mantle acted for Southern Cross Employment Agency Limited.
The Administrative Court’s decision last month in R (on the application of Mahoney) v Secretary of State for Communities and Local Government  EWHC 589 (Admin) considered whether the system of ‘home loss payments’ in the Land Compensation Act 1973 discriminates against gypsies and Irish travellers. Lindblom J found for the Secretary of State, holding that, while the act treats those who live in ‘bricks and mortar’ houses differently from those who live in caravans, this does not amount to discrimination under article 14 of the European Convention on Human Rights when read with article 8 and article 1 of the First Protocol.
On 12 February 2015 the Court of Appeal handed down his Judgment in Investment Trust Companies (in liquidation) v HMRC  EWCA Civ 82. The Court delivered a unanimous judgment upholding the March 2012 decision of Henderson J in some respects and overturning it in others.
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