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Point of view
On 12 October the Supreme Court gave its judgment in a long running VAT dispute between HMRC and DCM (Optical Holdings) Ltd (DCM). The judgment covers two distinct areas of VAT both of which are likely to be of interest to a broad range of taxpayers:
- the time bar of VAT assessments and in particular the application of the ‘one-year rule’ around evidence of facts;
- HMRC’s approach to VAT credits and specifically whether it has the power to refuse to make payment while a claim is being investigated and to subsequently reduce the amount of a credit.
The Supreme Court ultimately found in favour of HMRC in respect of both. Its findings may have ramifications for many taxpayers facing assessments raised by HMRC after a period of investigation and fact-finding.
They also justify HMRC’s current approach to the verification and payment of VAT credits to the...
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