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The taxpayer company, M, was co-operative society registered for VAT. Another co-operative society, L, also VAT registered, passed its engagements to the taxpayer, which claimed repayment of output tax overpaid under VATA 1994, s 80 and VAT Regulations 1995 SI 1995/2518 reg 35. HMRC rejected the claim as it related to VAT originally paid by L before the transfer of business to M.
The VAT tribunal dismissed the company's appeal since the VAT had been overpaid by L, not the taxpayer. The company appealed.
The judge ruled that nothing in the VATA 1994 and its associated regulations prevented a person with a claim under s 80 from passing that claim to another. The transfer of engagements between the societies was effective to transfer the benefit of the transferor's claims.
The taxpayer's appeal was allowed.
Midlands Co-operative Society Ltd v CRC, Chancery Division, 19 June 2007
