Errors of law in admitting late appeal

The taxpayer operated an amusement arcade and generated income from gaming machines. In June 2011 it submitted a claim for overpaid output VAT under VATA 1994 s 80. Referring to the long-running litigation involving the Rank Group it said the income from the takings should be exempt from VAT. It was a breach of fiscal neutrality for this income to be taxable when takings from electronic lottery ticket vending machines was exempt.

HMRC refused the claim on the ground that the machines were not similar. After a review the decision remained the same.

In August 2018 the taxpayer appealed against the review. The First-tier Tribunal accepted the late appeal. It accepted the taxpayer’s claim that it had not received notification of the result of the review. Further the delay caused no prejudice to HMRC because the appeal would have stood behind the Rank litigation. HMRC...