Avon Cosmetics Ltd v Revenue and Customs: FTTTx 11 Feb 2014

FTTTx Value Added Tax – Input tax – Failure of derogation dealing with retail sales made through non-registered representatives to provide for any deduction in respect of input tax for costs borne by representatives, whilst nevertheless rendering the Appellant (on selling to those representatives) liable to VAT by reference to the retail open market selling price received by the representatives – whether the derogation, the UK statutory provision implementing it or the Notice of Direction, applying the derogation to the Appellant could be varied by us – reference of this question to the European Court of Justice – further issue of whether the derogation itself was unlawful and should be set aside, an issue that can only be determined by the ECJ – reference of that issue to the ECJ with an indication that the derogation was not proportionate since it imposed additional tax in excess of any calculation of the tax avoided but for the derogation, once the representatives incurred costs that had suffered VAT – additionally the derogation occasioned ‘sticking tax’, and an element of unfair competition between the Appellant and its representatives, and those selling through normal VAT-registered retailers

Nowlan TJ
[2014] UKFTT 172 (TC)


Updated: 30 November 2021; Ref: scu.521771