FJ Chalke Ltd v HMRC (and related appeal)

VAT: Repayment claims

In FJ Chalke Ltd v HMRC (and related appeal) (CA – 25 March) the CA has dismissed the companies' appeals against the Ch D decision reported at [2009] STC 2027. The companies which traded as motor dealers had submitted claims for the repayment of output tax which they had wrongly accounted for from 1973 to 1996 on sales of 'demonstrator cars' on which input tax had been 'blocked' and which should have been treated as exempt (applying the ECJ decision in EC Commission v Italian Republic [1997] STC 1062) and on payments from manufacturers which should have been treated as discounts on the sale price of the cars (applying the ECJ decision in Elida Gibbs Ltd [1996] STC 1387).

Customs made the repayments together with simple interest under VATA 1994 s 78. The companies appealed contending that the...