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Disputed VAT payable as a condition of appeal

25 March 2019
Issue: 4689 / Categories: Tax cases
Snow Factor Ltd v CRC, Upper Tribunal (Tax and Chancery Chamber), 8 March 2019

In 2018 the First-tier Tribunal dismissed Snow Factor’s appeal on the VAT liability of sales of lift passes. The company appealed to the Upper Tribunal. HMRC did not require the company to pay the disputed VAT of £294 000 before the first appeal because it accepted this would cause hardship. 

After the First-tier Tribunal’s decision HMRC said the effect of VATA 1994 s 85A(3) was that the company should pay the sum due. In November 2018 the department wrote to the taxpayer saying the debt was now £484 521 but acknowledged that to pay the whole amount would cause ‘financial extremity’ (s 85B(4)). It therefore asked for £300 000 to be paid over three instalments.

Snow Factor applied to the Upper Tribunal to have the sum reduced on the basis that this would cause it financial extremity (s 85B(5)). The judge agreed from the cash flow forecasts and...

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