Cudworth of Norden v Commissioners for Her Majesty's Revenue and Customs
Decision date: 11 May 2011
Neutral citation: [2011] UKFTT 312 (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 whether goods taken by the appellant from the UK and sold on trade stands in Germany were zero-rated exports or constituted a taxable deemed supply in the UK. The First-tier Tribunal held that a deemed supply arose on removal of the goods from the UK and, because the appellant was not VAT-registered in Germany, standard-rate UK VAT was properly payable at that point. HMRC therefore correctly refused the appellant’s voluntary disclosure reclaim. The tribunal did not determine the quantum of any repayment and left evidential and time-limit issues open.
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’s decision identifies the binding ratio that, where a business removes goods from the UK to another Member State and deals with them in a way that constitutes a disposal in the course of business, a deemed supply occurs on removal which can be taxable in the UK; accordingly, zero-rating does not apply and a voluntary disclosure reclaim will be refused if tax was correctly due at that deemed-supply stage.
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 contains obiter observations that clear and explicit correspondence is important when HMRC staff offer practical assistance, and that practical evidential difficulties (such as proving cost price and compliance with time limits) are relevant to quantifying any repayment but do not decide the legal question of liability.