Different treatment

Nature of claims for repayment and claims for deduction

Compass claimed repayment of tax it had overpaid on catering supplies for the periods from 1 April 1973 to 2 February 2002. HMRC repaid the VAT for the periods to 31 October 1996 but rejected the others on the ground they were time-barred. It considered that the three-year limitation period had started to run on 4 December 1996 for the accounting periods ending from that date and that it had already expired on the date Compass filed the claims.

After the decision in Fleming (trading as Bodycraft) v CCE; Conde Nast Publications Ltd v CCE [2008] STC 324 HMRC had published Business Brief 7/08 setting out two dates for the entry into force of the new limitation rules: 4 December 1996 for repayment claims of overpaid VAT and 1 May 1997 for claims for the deduction of input VAT. Compass argued that the difference...