Tribunal has jurisdiction to rule on legitimate expectation

The taxpayer established in Poland entered into a contract to install a boiler in the UK with another Polish company who was not VAT registered in the UK. The taxpayer registered for VAT in the UK and HMRC issued an assessment for underdeclared VAT.

The taxpayer appealed saying it had legitimate expectation that it would not be assessed to VAT on particular supplies. The First-tier Tribunal dismissed the appeal on the ground the taxpayer had not acted reasonably in relying on HMRC’s statements.

The taxpayer appealed to the Upper Tribunal. It said the lower tribunal had erred in its conclusion and also that it did not have the jurisdiction to consider the public law issue of legitimate expectation in an appeal against a VAT assessment.

The Upper Tribunal decided the taxpayer did not have a legitimate expectation because its supplies were not limited to those mentioned...