The First Tier Tribunal (FTT) has dismissed an appeal by Bollinway Properties Ltd after HMRC refused to pay a £3m repayment supplement according to section 79 VAT Act 1994 in respect of Bollinway’s VAT return for the accounting period of 2010-18.

In October 2018 Toys R Us Properties Ltd (TRUP) raised an invoice to Bollinway for the sale of the properties plus VAT of around £70m and then ceased to trade.

Bollinway then submitted a VAT return for the period 2010-18 in which repayment of £71,170,729.68 was claimed. That amount represented the input tax that was incurred on the purchase of a property portfolio from Toys R Us Properties on 17 September 2018 for £355,853,648.39 plus VAT.

Bollinway asked HMRC to set off the amount of its credit which corresponded to the amount of output tax Toys R Us Properties would become liable to pay to HMRC.