Court of Appeal upholds 3 year cap on “post-implementation” claims for overpaid VAT

Leeds City Council v HM Revenue and Customs [2015] EWCA Civ 1293

The Court of Appeal has rejected Leeds City Council’s EU law challenges to the former 3 year limitation period in section 80(4) of the Value Added Tax Act 1994 on claims for VAT over-declared and overpaid in VAT periods ending on or after the introduction of the cap in December 1996 (so-called “Scottish Equitable” claims).  Dismissing Leeds’ appeal against the “impeccable” decision of the Upper Tribunal (Tax and Chancery Chamber), the Court of Appeal rejected various EU law arguments (invoking the principles of effectiveness, equivalence and legal certainty) that the 3 year cap had to be disapplied in relation to Leeds’ claims in circumstances where Leeds did not know it had claims and HMRC’s (erstwhile) public position had been inconsistent with the correct tax treatment of the supplies in question.

Andrew Macnab acted for HM Revenue and Customs

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