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The Queen (on the application of R Clarke and others) v CRC, Upper Tribunal (Tax and Chancery Chamber), 29 September 2017
Judicial review application on VAT registration
The claimants ran residential care homes. Until 2002 HMRC considered the supplies of the homes’ services as exempt under VATA 1994 Sch 9 Group 7. But in CCE v Kingscrest Associates Ltd and Montecello Ltd (trading as Kingscrest Residential Care Homes) [2002] STC 490 the High Court held that the exemption did not cover supplies by care homes.
As a result HMRC stated in Business Brief 28/04 that care homes did not have to register for VAT in the pre-Kingscrest period because it would remit any output tax for which the care homes were liable on the fees charged to their customers. However a care home could register and complete a single VAT return covering the whole period for which it was unwittingly making taxable supplies pre-Kingscrest.
The taxpayers did not register for VAT but in 2011 a consultancy firm advised...
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