Tax Appeals Commission determination 129TACD2022 regarding Value Added Tax, 2022

Administrative Decision Number129TACD2022
Date20 July 2022
Subject MatterValue Added Tax
1. This matter comes before the Tax Appeals Commission (hereinafter “the Commission”) as
an appeal against an assessment to Value Added Taxation (“VAT”) raised by the Revenue
Commissioners (“the Respondent”) on 4th October 2017.
2. The assessment covers the tax years 2013 and 2014 and the total VAT due on the
assessment amounts to €58,416. The Appellant is appealing the assessment in
accordance with section 119 (1) Value-Added Tax Consolidation Act 2010, as amended
(“VATCA 2010”).
3. The Appellant operates as an antiques dealer and specialises in the sale of antique
jewellery. The majority of the jewellery purchases made by the Appellant for the period
under appeal were sourced from United Kingdom (“UK”) suppliers.
4. On 3rd June 2016, the Appellant was notified of a Revenue Audit by the Respondent. The
scope of the audit was Income Tax and VAT for the tax years 2013 and 2014.
5. The Revenue Audit was conducted on 8th July 2016. During the course of the audit, the
Respondent became aware that the Appellant was providing her Irish VAT number to her
UK suppliers and those suppliers were charging zero VAT on the invoices which they
issued to the Appellant. As the Appellant’s business was registered for VAT in Ireland, it
was entitled (subject to certain conditions being fulfilled) to buy goods VAT free from
another business in the European Union (which the UK was then a part of).
6. The Respondent also became aware that the Appellant was operating the “margin
scheme” when accounting for VAT on the subsequent sale of the UK purchases to her
Irish resident customers. The margin scheme is provided for under section 87 VATCA
2010 and allows dealers in certain second-hand goods to pay VAT on the difference
between the sales price and the purchase price of goods.
7. The Respondent formed the view that the Appellant had not operated the margin scheme
in accordance with the legislation and that this resulted in an underpayment of VAT for
2013 in the sum of €25,988 and €31,925 for 2014.
8. In addition, the Respondent was of the view that total VAT deductibility had been
incorrectly claimed by the Appellant in respect of purchases which related to non-business
or personal use. The deemed VAT over-claim on these purchase invoices amounted to
223 for 2013 and €280 for 2014. The effect of these over-claims was that VAT was
deemed to be underpaid by the amount of over-claim for each of the years 2013 and 2014.
9. As an agreement could not be reached between the Appellant and the Respondent, the
Respondent issued a notice of assessment to VAT in the sum of €58,416 on 4th October
2017. The amount of VAT sought on this assessment represented the amount of the
deemed additional VAT due on the incorrect operation of the margin scheme (€57,913)
and the amount of the deemed over-claimed purchase VAT for the tax years 2013 and
2014 (€503).
10. On 5th December 2017, the Appellant who was not in agreement with the Notice of
Assessment lodged an appeal with the Commission. The Appeal hearing was held
remotely on 6th July 2022 with the Appellant and her Counsel in attendance. The
Respondent was represented by Senior and Junior Counsel.
Legislation and Guidelines
11. The following legislation is relevant to this appeal.

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