1864703 0376 TARIQ ZAMAN Mr C P Bishopp Mr J T B Strangward Birmingham 27 May The Appellant appeared in person Mr P Taylor of the Solicitor's Office of HM Customs and Excise, for the Respondents COLIN BISHOPP

	VALUE ADDED TAX  — voluntary registration — whether subsequent backdating possible — VATA Sch 1 para 9 — no backdating permitted

	VALUE ADDED TAX — pre-registration supplies — disallowance of input tax on supplies of services made more than six months before registration — VAT Regulations 1995 reg 111(2) — appeal dismissed

MANCHESTER TRIBUNAL CENTRE

 
 	
	TARIQ ZAMAN	Appellant

	- and -

	THE COMMISSIONERS OF CUSTOMS AND EXCISE	Respondents

				Tribunal:	 Mr C P Bishopp (Chairman)
						 Mr J T B Strangward (Member)	

Sitting in public in Birmingham on 27 May 2004

The Appellant appeared in person

Miss P Taylor, of the Solicitor’s Office of HM Customs and Excise, for the Respondents

	© CROWN COPYRIGHT 2004

DECISION

1.	The appellant, Tariq Zaman, trades as a restaurateur under the name “The Spice Company” from premises in Birmingham.  He embarked on his intended venture as long ago as January 1999, when he sought planning permission for the conversion of the premises to provide for the restaurant on the ground floor and living accommodation on the upper floor.  His application was refused but in 2002, following an appeal, planning permission was granted and work on the premises, leading eventually to its being opened as a restaurant, duly began.  
2.	In October 2002 Mr Zaman applied to be registered for VAT.  His application was somewhat ambiguous and it led to a telephone call made on 12 November 2002, by a Customs officer in the registration section to Mr Zaman, in order to ascertain precisely what it was he intended.  It was determined, as Mr Zaman agreed, that he wished to be registered from 1 October 2002, and registration on that basis was duly effected.  Mr Zaman’s first prescribed accounting period ended on 31 December 2002 and he rendered his return for that period in January 2003.  He claimed a repayment of £49,547.80.  The magnitude of the claim led to a credibility check by a Customs officer, Peter Yeomans, from whom we were to hear evidence.  
3.	Mr Yeomans told us that he had accepted that the bulk of the claim was valid, but had disallowed two items of input tax: £9,843.75 paid by Mr Zaman on the rent, and £1,925 incurred on some of the refurbishment work.  As Mr Yeomans explained, that input tax had been incurred more than six months before Mr Zaman’s registration date, and he had no choice but to disallow the claim to recover it.
4.	When this decision was communicated to him Mr Zaman made an application to the Commissioners to backdate his registration, but they refused.  That refusal was based upon paragraph 9 of Schedule 1 to the Value Added Tax Act 1994, which reads as follows:
“Where a person who is not liable to be registered under this Act and is not already registered satisfies the Commissioners that he —
(a)	makes taxable supplies; or
(b)	is carrying on a business and intends to make such supplies in the course or furtherance of that business,
they shall, if he so requests, register him with effect from the day on which the request is made or from such earlier date as may be agreed between them and him.”
5.	The Commissioners’ case, as it was put by Paula Taylor of the Solicitor’s office, is that a person who chooses to register when under no obligation to do so has only one opportunity of selecting his registration date.  Mr Zaman had taken that opportunity when he applied for registration, and once he was registered paragraph 9 (which applies only to those not already registered) ceased to be of any application.  There was no other provision by which a registered trader could seek amendment of his registration date and correspondingly no mechanism by which the Commissioners could backdate the registration.  Miss Taylor was able to demonstrate to us that this fact was made very clear in various publications made available by the Commissioners which Mr Zaman, who represented himself at the hearing, acknowledged he had not read, or at least had not read closely enough.
6.	Although we have some sympathy with Mr Zaman, it seems to us that Miss Taylor’s argument is unanswerable as indeed Mr Zaman acknowledged when the point was explained to him at the hearing.  We cannot, therefore, allow his appeal against the Commissioners’ refusal to backdate his registration.
7.	It is possible for a trader to claim as input tax VAT he has incurred on goods and services obtained by him prior to his registration date; the legislative provision allowing him to do so is regulation 111 of the Value Added Tax Regulations 1995 (SI 1995/2518) which we do not need to set out.  However, sub-regulation (2) imposes time limits.  Input tax incurred in the acquisition of goods for a period of up to three years before registration may be recovered, but that period is reduced to six months in the case of services.   Rent is, indisputably, the consideration for a supply of services and Mr Zaman conceded that the building work consisted mainly of labour rather than of materials; correspondingly what he paid for the refurbishment must also represent the consideration for a supply of services.  As Mr Yeomans disallowed only the input tax on services supplied to Mr Zaman more than six months before his effective date of registration, we cannot interfere with his decision and we must dismiss also this element of Mr Zaman’s appeal.
8.	
There will be no direction in respect of costs.

COLIN BISHOPP
CHAIRMAN
RELEASE DATE : 09/06/2004
MAN/03/0376