Revenue and Customs Commissioners v KE Entertainments Ltd

Value added tax – Claim to recover overpaid output tax – Taxable amount. Court of Session: Allowing an appeal by HMRC in a case in which a taxpayer which charged a fee for participation in bingo sessions recalculated its liability to tax in accordance with a business brief published by HMRC and made a retrospective claim for overpayment of tax, HMRC rejected the claim but the First-tier Tribunal upheld the taxpayer's appeal and the Upper Tribunal refused HMRC's appeal against that decision, the court held that the taxpayer's claim to recover overpaid VAT beyond the 4-year period permitted by s 80 of the Value Added Tax Act 1994 was based ultimately on the rights conferred by reg 38 of the Value Added Tax Regulations 1995 and reg 38 did not apply to the taxpayer's claim: in relation to that claim all that was involved was a readjustment of the manner in which the taxpayer calculated its VAT, and that could not be considered to be a 'decrease in consideration for a supply' within the meaning of reg 38.

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