Treatment of taxable and exempt supplies

DCM made taxable supplies of goods and exempt supplies of medical services. Disputes arose between the taxpayer and HMRC on several points. The First-tier Tribunal dismissed the taxpayer’s appeal so it proceeded to the Upper Tribunal.

The tribunal had four grounds of appeal to consider. First the taxpayer said HMRC had no power to amend repayment returns many years after the ends of the relevant periods. The judge agreed with the lower tribunal that the time bar provisions in VATA 1994 s 73(6) did not apply to HMRC’s decisions to reduce the amounts of the repayments claimed since they related only to the power to assess. It followed that there were no formal time limits for HMRC to decide whether a repayment claim falls to be paid in full.

The second issue related to the information DCM had to supply to customers to comply with Information Sheet 8/99 for a separately disclosed...