The Supreme Court has dismissed an appeal by Vieira Limited against Revenue assessments for additional VAT totalling €3,085,021, ruling that the assessments were validly raised and notified.
The judgment, delivered by Mr Justice Clarke on 20 October 2015, concerned an audit of Vieira’s VAT returns for two accounting years. Vieira, which built houses, had entered into rent-free licence agreements with estate agent Joseph McPeake. Vieira argued that the arrangements created a “self-supply” for VAT purposes, meaning the houses were taken out of the VAT system and would not attract VAT when later sold.
Revenue inspector Aidan O’Brien disputed that treatment and raised assessments for the difference between the VAT Vieira had paid and the amounts Revenue considered due. The assessments covered the years ending 31 August 2003 and 31 August 2004. A single notice set out the calculations for both years.
The Court stressed that the case was about the validity of the assessments, not whether VAT was actually due. That underlying tax dispute remains for the Appeal Commissioners and, if necessary, the courts on appeal.
Mr Justice Clarke found that O’Brien had relied on the European Court of Justice’s Halifax abuse-of-rights principles as an independent fallback basis for believing the tax was due. The Court held there was enough material for that belief, including a basis to consider that the licences produced a significant tax advantage and that obtaining such an advantage was their essential aim. It did not decide that the arrangements were in fact abusive or that Revenue’s tax treatment was ultimately correct.
The Court also held that VAT legislation permitted Revenue to issue separate assessments for consecutive periods. It found that two assessments had been made, each covering six consecutive two-month VAT periods, and that the single notice was sufficient because it separately stated the estimated tax, tax paid and balance due for each assessment.
The earlier year’s assessment was accepted by Revenue as out of time, and the tax for that year could not properly be collected. The appeal concerned whether the later year’s assessment was valid and whether the notice and separate assessments were lawful. The Court upheld them and said it was unnecessary to decide whether Vieira could raise the single-assessment argument at that stage.