Chancery Division

Published June 29, 2007

Midlands CoOperative Society Ltd v Revenue and Customs Commissioners

A taxable person entitled to the benefit of an overpayment claim of value-added tax was entitled to pass the benefit of that claim to another.

Mr Justice Blackburne so held in the Chancery Division on June 19, 2007, when allowing the appeal of Midlands CoOperative Society Ltd from the dismissal by a VAT and Duties Tribunal, which had dismissed its appeal from the rejection by the Commissioners of Revenue and Customs of its claim for the repayment of overpaid output tax.

Leicestershire CoOperative Society Ltd had made a transfer of engagements, under section 51(1) of the Industrial and Provident Societies Act 1965, to Midlands, with Leicester subsequently ceasing to exist.

Midlands’ claim under section 80 of the Value Added Tax Act 1994 in respect of output tax overpaid by Leicester prior to the transfer was refused by the commissioners on the basis that Midlands had no standing to make the claim.

The tribunal dismissed the appeal by Midlands as section 80 provided only for repayment to the taxable person who had made the overpayment and there was no basis for treating Midlands and Leicester as the same.

HIS LORDSHIP said that there was nothing in the statutory code, either expressly or by necessary implication, to prevent a person with a section 80 claim from passing it to another and the transfer of engagements between Leicester and Midlands was effective to transfer to Midlands the benefit of Leicester’s claim under section 80.

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