Megantic Services Limited v Commissioners for Her Majesty's Revenue and Customs
Decision date: 19 March 2010
Neutral citation: [2010] UKFTT 125 (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
Megantic Services appealed HMRC's refusal to pay VAT repayment supplements for nine periods; the Tribunal found on the balance of probabilities that HMRC's date‑stamping of returns was reliable, that its internal VOPS 240 payment instructions can constitute the "written instruction directing the making of the payment" under s79(2)(b), and that properly pleaded and evidenced HMRC inquiries suspended the 30‑day period. Applying those findings, the Tribunal concluded the inquiry periods meant no supplements were payable and dismissed the appeals.
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: medium
The Tribunal held that an internal written instruction (the VOPS 240) which directly leads to payment can satisfy the statutory requirement of a "written instruction directing the making of the payment" under s79(2)(b), and that periods during which HMRC has properly raised and pursued reasonable inquiries (and has pleaded and evidenced them) suspend the 30‑day relevant period (as reflected in the applicable regulations), so such inquiry periods are excluded when computing entitlement to repayment supplements.
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 rejected a narrow rule requiring the written instruction to be sent to an external third party (such as a bank) to qualify; it also expressed that a literal construction of s79(2)(b) that would require payment of supplements despite actual payments occurring within 30 days would be absurd and should be avoided.