UPDATE: THE UT HAS UPHELD AN APPEAL AGAINST THIS DECISION – SEE THE CLARITAX NEWS STORY.
The FTT has dismissed an appeal which considered whether “dip pots” supplied as part of a takeaway meal deal where part of a single supply – Queenscourt Ltd v HMRC [2024] UKFTT 460 (TC).
VALUE ADDED TAX – whether dip pots supplied as part of a takeaway meal deal are a separate standard rated supply or whether they are part of a single supply – validity of assessment under s 80(4A) Value Added Tax Act 1994 – jurisdiction of the First-tier tribunal to consider arguments based on legitimate expectation in the context of an appeal under s 83(1)(t) Value Added Tax Act 1994 – whether HMRC precluded from recovering tax wrongly credited under s 80 Value Added Tax Act 1994 either on the basis of legitimate expectation or estoppel by convention – appeal dismissed.
On the main issue, the FTT commented that:
“Taking into account all of the circumstances, our conclusion is that the supply of a dip pot as part of a meal deal is not, for the typical consumer, an aim in itself but is a means of better enjoying the hot food which is included as part of the meal deal.”
On the question of the validity of the assessment, “the fact that this resulted from a mistake by the original HMRC officer who dealt with the first error correction notice does not prevent a valid assessment from being made under s 80(4A) VATA”.
On the question of legitimate expectation, the FTT commented:
“Whilst Queenscourt cannot be criticised for not doing HMRC’s job for them, given the existence of HMRC guidance referring to the Domino’s case where dips supplied with hot food were treated as part of a single standard rated supply which, given PWC’s expertise, they would no doubt have been aware of, it is hard for Queenscourt to say that it is conspicuously unfair for HMRC to recognise its mistake and to apply the law correctly despite its original acceptance of the claim.
Overall, taking all these factors into account, we do not consider that any detriment which may have been suffered by Queenscourt is sufficient to enable us to say that HMRC’s decision is so outrageously unfair that it should not be allowed to stand.”
Finally, the FTT held that the requirements for the company to rely on estoppel by convention were not fully satisfied.
https://caselaw.nationalarchives.gov.uk/ukftt/tc/2024/460
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Value Added Tax, written by Ciaran McGee MA (Oxon), FCA, CTA, is an extensive volume (over 1,000 pages), written primarily for non-VAT specialist accountants and tax advisers.
