Moulsdale (t/a Moulsdale Properties) v Revenue and Customs (Scotland) [2023] UKSC 12 (22 March 2023)
Citation:Moulsdale (t/a Moulsdale Properties) v Revenue and Customs (Scotland) [2023] UKSC 12 (22 March 2023)
Rule of thumb:If a person opts in to pay VAT on the purchase of a property to reduce an existing VAT bill, can they opt-out of VAT on the sale? No, once VAT is opted in to be paid on a purchase, the property becomes a VAT property, and VAT must be paid on the sale as well.
Rule of thumb:Can you change your legal arguments as you move through the appeal process? Yes, legal reasoning can oscillate as it moves through the appeal process, however, the facts cannot be changed.
Background facts:The basic facts of this case were that Moulsdale owed a VAT bill. Moulsdale was getting a loan to buy a property, so Moulsdale opted pay VAT on the purchase of the property, which he was getting a loan for anyway, and then used this to cancel the VAT bill owed to the Government at that time. However, when Moulsdale went to sell the property, he did not want to pay VAT on the sale of this.
Parties argued:HMRC stated that once a property is opted into this, then this applies on both the purchase and the sale. Moulsdale argued that you could opt-in for both.
Court held:This essentially came down to a statutory interpretation exercise on the meaning of the statute. The Court affirmed that HMRC’s interpretation of the statute was correct. Moulsdale had to pay VAT on the price he received for the property when he was selling it. Once VAT is ‘opted in’ on the purchase, then VAT must be paid on the sale as well.
Ratio-decidendi:
‘For reasons different from those given by the Inner House, I would refuse the appeal on the basis that, as HMRC submit, the construction for which they contend is the correct way for the court to make as much sense as it can of the text of the statutory provisions read in its appropriate context’, Lady Rose at 67.
Warning: This is not professional legal advice. This is not professional legal education advice. Please obtain professional guidance before embarking on any legal course of action. This is just an interpretation of a Judgment by persons of legal insight & varying levels of legal specialism, experience & expertise. Please read the Judgment yourself and form your own interpretation of it with professional assistance.