VAT: capped claims on input tax

It is said that there is a time for everything under the sun, a time to cry and a time to laugh. One taxpayer is currently laughing, because even if he did not get his timing right in making a VAT claim in time, the Court of Appeal has nevertheless allowed his claim even though it was made 10 years after he could have initially claimed and even though normally there is now a three year limitation period!

The taxpayer, Mr Fleming (t/a Bodycraft) traded in motorcars and when he bought three of them in 1990, he did not claim VAT input tax. He only did this in 2000. HM Customs refused his claim because Regulation 29(1A) of the Value Added Tax Regulations 1995/2518 blocks any claims made more than three years after the return in which he was originally eligible to claim. On the face of it he was 7 years too late.