Group claims for overpaid tax

This was a joint appeal from several companies concerning which ones had the right to claim back tax when the goods or services on which the tax was wrongly levied were supplied by companies that were at the time of the supply members of a VAT group but had left by the time the claim was made.

The Principal VAT Directive Art 11 provides that member states ‘may regard as a single taxable person’ any persons established in its territory who although legally independent are closely bound to one another by financial economic and organisational links. It permitted but did not require member states to adopt provisions for VAT grouping. The UK chose to enact the provision in VATA 1994 s 43 to s 44. The question was whether those provisions in conjunction with s 80 correctly implemented the directive.

HMRC accepted the claims...