Watt Power (UK) Ltd v Her Majesty's Revenue & Customs
Decision date: 16 October 2009
Neutral citation: [2009] UKFTT 263 (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
Watt Power (UK) Ltd appealed HMRC assessments disallowing a reclaimed input tax amount of £11,715 (period 12/03) and a misdeclaration penalty of £1,757. The tribunal found WP had not produced a valid invoice or satisfactory supporting evidence that output VAT had been properly accounted and so dismissed the appeal against the assessment and the penalty. The tribunal also ordered WP to pay HMRC's costs from the end of the first day's hearing (but not for that first day).
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: low
A claimant seeking recovery of input tax must produce a valid invoice or other evidence satisfactory to the Commissioners evidencing that the tax was properly accounted; absent such evidence and a clear audit trail demonstrating output tax was paid, refusal of the reclaim is justified. Non‑compliance with directions to produce supporting documentation and failure to attend a resumed hearing can support a costs order limited to the period after the non‑compliance.
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 noted that the absence of a formal self‑billing agreement does not automatically bar repayment if HMRC is satisfied tax was properly accounted and repayments were properly made. It also observed that documents produced late by a third‑party witness, particularly where provenance and primary supporting records are lacking, may be insufficient to establish entitlement.