In the case of Holiday Booking Management v HMRC [2026] UKFTT 587 (TC), the FTT has dismissed an application by HMRC to strike out the company’s appeal on the grounds that there was no prospect of success.
Strike out application – refused
The Appellant had appealed a decision to reduce the amount of a repayable VAT credit on the grounds that the assessment was out of time as per VATA 1994, s. 73. HMRC argued that, as the dispute concerned the quantum of a VAT repayment rather than collection of outstanding VAT, there was no assessment to appeal and therefore the time limits in s. 73 could not apply (“Where a pre-repayment credibility check reveals that a lower repayment is due, we cannot and do not make an assessment under s73 VATA 1994 as there is no net tax due and none has been credited.”)
The FTT considered the matter and noted that:
- it did not yet have full details of the arguments that may be advanced at any substantive hearing;
- HMRC had noted in their decision letter that an appeal to the FTT was an option;
- HMRC characterised their action as an adjustment under VATA 1994, s. 25(3), however, s. 25(3) defines a VAT credit; it does not provide a procedural framework for adjustments;
- s. 25 (4) (5) and (6) set out conditions as to payment of that credit, or hold over of that credit, or withholding of the payment until further requirements have been complied with;
- the case law relied on by HMRC discussed timing of VAT reclaim payments, and checks that HMRC are allowed to make before a repayment, but this did not set out clearly HMRC’s contention that an adjustment to a VAT credit should not be subject to appeal, where that adjustment is envisaged to be final, rather than subject to further checks;
- the Appellant had alerted the FTT to a case which had made it clear that there is no statutory definition of “assessment”.
The FTT therefore decided that:
“the Appellant has an arguable case that this decision should fall within the relevant time limits set out in s73 VATA 1994. … The application is therefore dismissed.”
https://caselaw.nationalarchives.gov.uk/ukftt/tc/2026/587?tribunal=ukut%2Ftcc&tribunal=ukftt%2Ftc
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