Susan Frances Nike v Commissioners for Her Majesty's Revenue and Customs
Decision date: 3 December 2009
Neutral citation: Neutral citation not available
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 converted a derelict barn into a dwelling and was charged VAT at 17.5% on various contractor invoices; she claimed under the DIY builders' VAT scheme and HMRC refunded at 5% but refused to repay the excess. The tribunal found the works were qualifying services within a qualifying conversion so the correct rate was 5%, but held HMRC is only liable to refund VAT that is properly chargeable under the statute and has no discretion to repay VAT charged in excess of that statutory rate. The appeal was dismissed, leaving the appellant to pursue any private law remedy against her supplier for overcharged VAT.
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 treated as binding the statutory scheme in s35 VATA 1994 and Schedule 7A, Group 6: supplies of qualifying services in a qualifying residential conversion are chargeable at the reduced 5% VAT rate, and HMRC’s repayment liability is limited to VAT properly chargeable under that statutory scheme, not to amounts suppliers have charged above the correct rate.
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, sympathetically, the practical unfairness that can arise where consumers end up worse off because of timing and limitation rules—for example where suppliers cannot reclaim overpaid output tax after the three‑year cap—leaving consumers or suppliers out of pocket; this was expressed as observation rather than binding principle.