In Bratt Auto Contracts Limited and Bratt Auto Services Limited v HMRC [2016] UKUT 90(TCC), the Upper Tribunal (UT) considered the statutory requirements for valid claims for overpaid VAT under section 80 of the Value Added Tax Act 1996 (VATA).


Bratt Auto Contracts Ltd (BAC) and Bratt Auto Services Limited (BAS), are associated companies. They both own fleets of vehicles which are rented or leased to their customers; BAS deals in short-term rentals and BAC in long-term contract hire.

In March 2009, by a single letter the companies submitted section 80 claims for overpaid output VAT for (1) output tax declared upon the margin where the input tax on the vehicle was not deductible (European Commission v Italian Republic C-45/95); and (2) bonuses paid on demonstration cars where the VAT on the vehicles was blocked (Elida Gibbs Ltd v Customs and Excise Commissioners C-317/94) (the Claims).

HMRC rejected the claims on the basis that they did not satisfy the statutory requirements of regulation 37 of the Value Added Tax Regulations 1995 (SI 1995/2518). The rejection was upheld on review.

Despite the rejection of the Claims further information was volunteered to HMRC by BAC and BAS. HMRC remained of the view that the Claims did not satisfy the statutory requirements and the companies therefore appealed to the FTT.

The FTT decided that, in part, there was a valid claim in so far as it stated the sum claimed and how it had been calculated. It also concluded that the provision of the further information did not constitute a new claim and was simply an amendment of the original claim and therefore the claim was not time barred.

The companies and HMRC were dissatisfied with the FTT’s decision and they appealed to the UT.

The UT’s decision

The companies argued that the relevant statutory provisions had to be construed in a purposive manner and that the claims complied with the legislation.

The UT considered section 80(6) VATA, which requires the claim to be “made in such form and manner” as may be prescribed (the prescription appears in regulation 37). Compliance with regulation 37 is mandatory. A claim cannot be made without specifying the amount or the method of calculation.

The Claims referred to several accounting periods but had not stated how the amount was to be apportioned over those periods. In the UT’s view, in order to comply with section 80(6)  and regulation 37, a separate claim must be made for each period, identifying that period, the amount for which repayment is sought and the method. Accordingly, as the total sum claimed in the Claims were not allocated to the relevant VAT accounting periods, the UT concluded that the Claims were invalid.


The UT’s decision confirms that a valid section 80 claim must be allocated to the relevant VAT accounting periods.

In circumstances where it is not possible to make a precise calculation allocating an exact amount of tax to each prescribed accounting period, the UT commented it had no objection  to a calculation which arrived at a figure for a whole year and then apportioned it equally to the accounting periods within that year. Such an approach would be compliant with regulation 37, as equal apportionment represents an element of calculation.

As there had been no attempt to apportion the amount claimed in this case, the UT concluded that the Claims failed to satisfy the statutory requirements. The UT was not willing to imply that equal apportionment over the prescribed accounting periods had been intended.

A copy of the UT’s decision is available to view here.