Judgment summary
This case concerns an appeal by Beritaz Care Ltd, representative member of the Beritaz VAT Group, against HMRC's decision to grant VAT group membership to Robertson Nursing Home Limited (RNHL) only from 8 May 2025, rather than from 1 May 2021 as requested (2). HMRC applied to strike out the appeal under rule 8(2) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 on the ground that the Tribunal lacked jurisdiction (1).
The Tribunal, sitting on the papers, determined the strike out application without a hearing under rule 29(3) (4). Judge Matthew Donmall concluded that because HMRC did not refuse the RNHL Membership Request within the statutory 90 day period, the request was deemed granted with effect from the date of receipt, 8 May 2025, and the subsequent decision refusing retrospective backdating did not amount to a refusal of an application within section 43B(1) or (2) VATA giving rise to a right of appeal under section 83(1)(k) VATA (25-27).
The appeal was accordingly struck out under rule 8(2)(a) for want of jurisdiction (30, 32).
Background
On 1 May 2021, the Appellant registered for VAT as representative member of the Beritaz VAT Group along with five other entities, including Robertson Care Home Ltd, but RNHL was not included, which the Appellant says was due to an administrative oversight by its former VAT advisors (5(1)).
On 8 May 2025, the Appellant made the RNHL Membership Request for RNHL to be added to the Beritaz VAT Group with effect from 1 May 2021 (5(2)). HMRC did not refuse the request within 90 days (5(3)). On 6 August 2025, the Appellant's agent wrote to HMRC asserting that RNHL must be treated as a member of the Group since the 90 day period for refusal had expired (5(4)).
On 14 August 2025, in the Decision, HMRC confirmed RNHL was to be treated as a member of the Beritaz VAT Group, but only from 8 May 2025, not 1 May 2021 (5(5)). According to the Review Conclusion, Officer Segnatelli refused the earlier date because the VAT grouping structure was considered a form of tax avoidance, relying on HMRC Internal Manual VGROUPS02550 and Revenue and Customs Brief 2 2025, which addresses VAT grouping structures used by state-regulated care providers with non-state-regulated welfare service providers (5(5)).
On 30 December 2025, the Review Conclusion upheld the Decision (5(6)). The Appellant appealed to the Tribunal on 13 January 2026, contending there was a fundamental inconsistency in HMRC refusing the retrospective date on avoidance grounds while allowing the request to take effect from 8 May 2025 (5(7)). On 24 April 2026, HMRC made the Strike Out Application on the basis that there had been no refusal of an application under section 43B VATA for the purposes of section 83(1)(k) VATA (5(8)).
Core dispute
The issue was whether the Tribunal had jurisdiction under section 83(1)(k) VATA to hear an appeal against HMRC's refusal to backdate RNHL's VAT group membership to 1 May 2021, where HMRC had not refused the underlying membership application within the 90 day period specified in section 43B(5) VATA (3, 23-24).
HMRC argued that the Decision did not refuse an application within section 43B(1) or (2), but merely declined to exercise discretion under section 43B(4)(b) to backdate membership, and that because there was no refusal within 90 days, the application was already deemed granted from the date of receipt, relying on Dollar Financial UK v HMRC [2023] UKUT 256 (TCC) (23).
The Appellant argued that the Decision did constitute a refusal of an application under section 43B(2) to the extent it refused the requested effective date, that section 84(4A) VATA supported this reading, that Copthorn Holdings Ltd (No. 1) v HMRC [2013] UKFTT 190 left open the relevant question, and that Dollar Financial was distinguishable because it concerned an invalid application to amend an existing VAT group registration (24(1)-(4)).
Court findings
The Tribunal reviewed the statutory framework in sections 43A, 43B, 83 and 84(4A) VATA (6-9), and the case law in University of Essex v HMRC [2010] UKFTT 162 (TC), Copthorn Holdings Ltd (No. 1) v HMRC [2013] UKFTT 190, Copthorn Holdings (No. 2) [2015] UKFTT 405 (TC), and Dollar Financial UK Ltd v HMRC [2023] UKUT 256 (TCC) (10-22).
The Tribunal held that the logic of the Upper Tribunal's decision on the third ground in Dollar Financial applied equally here: because there was no refusal of the RNHL Membership Request within 90 days, RNHL's membership was deemed granted with effect from 8 May 2025, the date of receipt, under section 43B(4)(a) VATA (25, 27).
By parity of reasoning with Dollar Financial, the subsequent Decision of 14 August 2025 refusing retrospective commencement did not give rise to a right of appeal under section 83(1)(k) VATA, because by that time there was already a deemed grant with effect from 8 May 2025 (27).
The Tribunal found the Dollar Financial reasoning on this point highly persuasive even though obiter, and gave three further reasons for rejecting the Appellant's argument: section 43B(2)(a) refers only to the application for membership and says nothing about the commencement date; the section 43B(4)(b) discretion is unlimited whereas section 43B(2)(a) refusals are confined to the grounds in section 43B(5), so treating a backdating request as a section 43B(2)(a) application would remove that discretion; and treating a backdating request as part of the section 43B(2)(a) application would create uncertainty by allowing an application to be simultaneously granted and refused (28).
The Tribunal held that section 84(4A) VATA did not assist the Appellant, as it underlines the distinction between a section 43B(2) application proper, refusable only on section 43B(5) grounds, and a backdating request subject to unconstrained discretion under section 43B(4)(b) (29).
The Tribunal noted a potentially open question as to the position where, within 90 days, a membership request is granted but a backdating request refused, referencing Copthorn Holdings (No. 1) at [124], but found this did not arise on the facts because there was no refusal within 90 days (31).
Outcome
The Tribunal concluded that it did not have jurisdiction to consider the appeal (30). The appeal was struck out under rule 8(2)(a) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (32).
Major issues / areas of contention
- Whether the Tribunal has jurisdiction under section 83(1)(k) VATA to hear an appeal against HMRC's refusal to backdate VAT group membership.
- Whether HMRC's failure to refuse the RNHL Membership Request within 90 days under section 43B(5) VATA meant the request was deemed granted from the date of receipt under section 43B(4)(a).
- Whether a decision declining to exercise discretion under section 43B(4)(b) to backdate membership constitutes a refusal of an application within section 43B(1) or (2) VATA giving rise to a right of appeal.
- The application of Dollar Financial UK Ltd v HMRC [2023] UKUT 256 (TCC) to circumstances where a membership request, rather than an amendment request, was at issue.
- The relevance of section 84(4A) VATA to the scope of appealable decisions under section 43B(5)(c).