Commentary

BB/25/04 VAT—Customs' policy on assessments following the judgments of the High Court in C & E v Laura Ashley and the Court of Appeal in DFS Furniture Company v C & E

Part V16 Forms and other HMRC material

BB/25/04 VAT—Customs' policy on assessments following the judgments of the High Court in C & E v Laura Ashley and the Court of Appeal in DFS Furniture Company v C & E

BB/25/04 VAT—Customs' policy on assessments following the judgments of the High Court in C & E v Laura Ashley and the Court of Appeal in DFS Furniture Company v C & E

Business Brief, Issue 25. 14 September 2004

This Business Brief clarifies Customs' policy on assessments following recent court judgments in Laura Ashley and DFS. Taxpayers are not asked to take any action as a consequence of this Business Brief.

General

The recent judgments in Laura Ashley, in the High Court, and DFS, in the Court of Appeal, are concerned with the validity of VAT recovery assessments, ie assessments made to recover money paid, repaid or credited to taxpayers in error. The judgments raised several points that Customs regarded as “unsettled” and so we petitioned the House of Lords to hear a further appeal in the DFS case to clarify the position for the benefit of Customs and taxpayers alike. That petition was unsuccessful and so the DFS litigation is now at an end.

In dealing with the validity of recovery assessments, the court judgments, by implication, raise an issue of a more general nature about the effect of a finding that any assessment raised by Customs is invalid. It is Customs' view that the proper course for a taxpayer to take if the taxpayer has been assessed and believes the assessment to be incorrect for any reason is to ask Customs to review the decision and, if still unsatisfied, to make a timely appeal to the VAT & Duties Tribunal.

Where an

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