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MKH was an National Health Service trust entitled to recover VAT charged on supplies that were not for business purposes (VATA 1994, s 41). It claimed expenditure on IT equipment which HMRC repaid. However, it later decided MKH was not entitled to the refund and raised an assessment under s 73 for the sum overclaimed.
The First-tier Tribunal dismissed the trust’s appeal, so it appealed to the Upper Tribunal. It claimed HMRC was not entitled to recover the overpaid VAT.
The issue was whether s 73 allowed HMRC to assess VAT overclaimed under s 41. The tribunal said it was plain from the legislation that a claim under s 41 related to chargeable VAT. Section 73(2) clearly permitted an assessment where ‘any person’ had been refunded VAT that should not have been ‘so credited’.
The judges agreed with the First-tier Tribunal that the provisions were ‘clear and unambiguous’.
The taxpayer’s appeal was dismissed.
