Starglaze Windows & Conservatories ltd v Commissioners for Her Majesty's Revenue and Customs
Decision date: 12 March 2010
Neutral citation: [2010] UKFTT 119 (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
The appellant, Starglaze, issued invoices for promotional UPVC windows it did not expect to be paid for and later attempted to reverse the VAT by an internal ledger adjustment without issuing credit notes. The FTT held that regulation 38/24 did not permit that internal document as an effective credit-note equivalent and that the appellant had not made a valid voluntary disclosure under the Commissioners' published written-claim procedure. The appeal was dismissed except for a conceded reduction, leaving a disputed liability of £9,815.38.
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
A reduction in consideration for VAT purposes must be evidenced by a credit or debit note or by a document that records the event giving rise to the reduction and its acceptance by the other party; an internal accounting schedule prepared and retained solely by the supplier is not an adequate equivalent. Separately, a voluntary disclosure under the Commissioners' Public Notice procedure requires compliance with the specified written-claim process and cannot be effected by piecemeal provision of information to officers.
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 an invoice was never properly payable because no supply occurred, the concept of a later "reduction in consideration" may not apply, distinguishing such cases from those where an initially valid invoice is subsequently reduced. It also noted Field J.'s approach that documents need not be issued to customers unable to recover input tax, but even that approach requires a document recording mutual acceptance of the triggering event.