Assignment of VAT claims

The High Court, in Midlands Co-Operative Society Ltd v HMRC [2007] EWHC 1432 (Ch), has held that a person entitled to the benefit of a VAT refund claim is able to pass the benefit of the claim to another.

The decision confirms the view, already expressed by some commentators, that it is possible for a trader to sell their right to a refund. This may present any number of opportunities, especially when it comes to the more technicaly complex claims which may take many years to be resolved. One wonders whether a secondary market may develop for third party companies to buy up such claims, and to maintain portfolios of actions against Customs.