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Two actions appeared before the Upper Tribunal (Tax and Chancery Chamber).
In the first GMAC a supplier of cars on hire-purchase terms had made a claim in February 2006 for bad-debt relief in respect of VAT for the period from 1978 to 1990 – which HMRC refused.
The First-tier Tribunal found for the taxpayer saying the insolvency and property conditions in VATA 1983 s 22 were not compatible with the EU Sixth Directive. The taxman appealed.
In the second action BT had claimed bad-debt relief in 2009 concerning bad debts from 1978 to 1998. The Revenue refused and was upheld on review.
The Upper Tribunal said the period from November 1996 to March 1997 had not been an adequate transitional period within which GMAC could have been required to assert its directly enforceable rights.
Claims in respect of bad debts arising before March 1997...
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