Cambria Automobiles (South East) Ltd & Invicta Motors Ltd – UT – 2003 Italian claim and s85 agreement – whether subsequent claim for same period valid – no – taxpayer loss

The dispute involves claims for overpaid output tax on the sale of demonstrator motor vehicles between 1973 and 1996.
The taxpayers initially accounted for VAT on the profit margin of these vehicles but later submitted claims based on the interpretation of the law in the case of Commission v Italian Republic.
HMRC accepted these claims and settled them in 2006 under a section 85 agreement.
However, it was later discovered that there were errors in the calculation methodology used for the claims, resulting in larger claims.
The taxpayers submitted new claims in 2009, but HMRC rejected them.
The taxpayers appealed, and the Upper Tribunal (UT) set aside the earlier decision due to errors of law.
The UT concluded that the section 85 agreement precluded the taxpayers from making any further claims, even if they were valid under the correct methodology.

Source KPMG

Refund