Principle of effectiveness was not breached

The taxpayer who was a farmer applied to use the agricultural flat rate scheme (AFRS). HMRC granted certification in July 2004. However in October 2012 HMRC told the taxpayer the certification was to be cancelled on the ground it was necessary to protect the revenue (VAT Regulations reg 206(1)(i). Having missed the appeal deadline the taxpayer applied to the First-tier Tribunal for permission to make a late appeal. The tribunal refused so he appealed to the Upper Tribunal.

The taxpayer based his appeal on the Court of Justice of the EU’s decision in Shields & Sons Partnership v CRC (Case C-262/16) [2017] STC 2205 that HMRC’s decision to exclude the taxpayer from the AFRS because they were recovering more under that scheme than they would under the normal VAT arrangements was in breach the taxpayer’s EU law rights.

The issue was that in...