Rolldeen Estates Limited v The Commissioners for HMRC
Decision date: 4 April 2023
Neutral citation: [2023] UKFTT 359 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This case concerned whether Sch 10 para 30 (commenced 1 June 2008) could be used to validate a purported option to tax (OTT) with an effective date of 10 January 2008 and whether Rolldeen had a right of appeal. The Tribunal held para 30 could validate the OTT only so far as it affected supplies made after 1 June 2008 (thus covering the 2015 sale), that Rolldeen had no right of appeal under VATA s 83(1)(wb) (appeal struck out for want of jurisdiction), and alternatively HMRC’s use of para 30 was reasonable; the £50,000 VAT assessment therefore remains payable.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: medium
The Tribunal’s ratio is that Sch 10 para 30 may be validly exercised from its commencement so as to validate purported OTTs, but any retrospective effect is limited to supplies made after the provision’s operative date (1 June 2008). Further, VATA s 83(1)(wb) does not give a right of appeal against HMRC’s unilateral discretionary decision to exercise para 30 to the detriment of the taxpayer; s 83(1)(wb) applies where HMRC refuse or decline to exercise a power in favour of a person.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The Tribunal observed (obiter) that where both parties have proceeded on a common assumption that an OTT is valid and mutual dealings (e.g. input tax reclaims and repayments) have occurred, applying para 30 can serve the statutory purpose of preventing significant tax loss; and that HMRC’s failure to carry out further compliance checks is not, by itself, unreasonable where the taxpayer provided signed misleading information on which HMRC reasonably relied.