Treasures of Brazil Limited v The Commissioners for HMRC
Decision date: 17 October 2024
Neutral citation: [2024] UKFTT 929 (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 appeal concerned a s.73 VAT assessment issued to Treasures of Brazil Ltd for period 12/22 after the company voluntarily registered for VAT but, following an email from HMRC, did not charge VAT before receiving formal confirmation. The Tribunal held it had jurisdiction to consider a legitimate expectation defence, found HMRC's instruction email created a clear, unqualified legitimate expectation not to charge or collect VAT pending registration, and set the assessment aside so the company may retain the input tax claimed.
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: high
The Tribunal decided that a First-tier Tribunal hearing an appeal under s.83(1)(p) can entertain public-law defences including legitimate expectation because s.73 assessments involve the exercise of statutory discretion and the appellate jurisdiction is defined by subject-matter; and where HMRC issues a specific, clear and unqualified instruction to a taxpayer or their agent, that instruction can give rise to a legitimate expectation (overriding general guidance) which may prevent HMRC from enforcing an assessment that would be conspicuously unfair.
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 judgment suggests (obiter) that specific communications from HMRC should be read as taking precedence over general statutory notes or online guidance for the recipient, that it can be particularly unfair to require a trader to fund VAT which HMRC instructed them not to collect (especially small or new businesses), and that HMRC could avoid such issues by revising the wording of forms/emails.