The taxpayer sold double glazing, supported by an insured guarantee, for which a charge was made. The additional charge was exempt, but it was contended that the contract should have stated the amount pursuant to Note 5.
Held: The contract gave the rate of charge at 10 per cent. The Act allowed the commisioners to set a form of notice, but this had not been done. The requirement was intended to prevent value shifting between taxable and exempt supplies. That purpose was satisfied by the form actually used. The contract set the amount at the time of the contract. A requirement which did not allow the exemption for the insurance service would be contrary to European law: ‘the Commissioners’ construction does not conform to the terms of the Sixth Directive and it is therefore necessary to adopt the alternative construction which does. I would therefore allow the appeal and declare that the taxpayer is entitled to exemption for the consideration attributable to insurance-related services during the relevant period.’ (Lord Slynn of Hadley dissenting)
Judges:
Hoffmann, Slynn of Hadley, Woolf, Hope of Craighead, Walker of Gestingthorpe, LL
Citations:
Times 21-Feb-2003, [2003] UKHL 7, [2003] STC 419, [2003] 1 WLR 656, 2003 SLT 355, [2003] BVC 249, [2003] 1 CMLR 37, 2003 SC (HL) 21, 2003 GWD 8-239, 2003 SCLR 222, [2003] BTC 5193, [2003] STI 267, [2003] 1 All ER 801
Links:
Statutes:
Value Added Tax Act 1994 Sch 9 Group 2 Note (5), EC Sixth Directive on turnover taxes (77/388/EEC)
Jurisdiction:
Scotland
Citing:
Appeal from – Cr Smith Glaziers (Dunfermline) Ltd Against A Decision of Edinburgh Vat and Duties Tribunal OHCS 16-Feb-2001
. .
Cited – Jeunehomme and Others v Belgian State; Jorion v Belgium State ECJ 14-Jul-1988
It was legitimate for Belgium to require, as a condition of a VAT deduction, that the invoice on the sale of a motor car should contain a good deal of information enabling the car to be identified and thereby to prevent substitution and fraud. But . .
Cited – Ampafrance SA v Directeur des Services Fiscaux de Maine-et-Loire ECJ 19-Sep-2000
Europa 1. Council Decision 89/487, adopted on the basis of Article 27 of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, which provides that a Member State . .
Cited – Muys’ en De Winter’s Bouwen Aannemingsbedrijf v Staatssecretaris van Financien ECJ 27-Oct-1993
Europa Tax provisions – Harmonization of laws – Turnover taxes – Common system of value added tax – Exemptions provided for by the Sixth Directive – Exemptions in respect of transactions relating to the granting . .
Cited – Litster and Others v Forth Dry Dock and Engineering Co Ltd HL 16-Mar-1989
The twelve applicants had been unfairly dismissed by the transferor immediately before the transfer, and for a reason connected with the transfer under section 8(1). The question was whether the liability for unfair dismissal compensation . .
Cited – Stichting Uitvoering Financiele Acties v Staatssecretaris Van Financien (Judgment) ECJ 15-Jun-1989
For VAT the general rule is that a turnover tax is levied on all services supplied for consideration by a taxable person. Exemptions are to be strictly construed in the VAT legislation. . .
Cited by:
Appealed to – Cr Smith Glaziers (Dunfermline) Ltd Against A Decision of Edinburgh Vat and Duties Tribunal OHCS 16-Feb-2001
. .
Cited – Lex Services plc v Her Majestys Commissioners of Customs and Excise HL 4-Dec-2003
When taking a car in part exchange, the company would initially offer the correct market value. If the customer wanted, the company would agree a higher price. When cars were returned, the company at first reclaimed the VAT on the re-purchase price, . .
Cited – Revenue and Customs v Debenhams Retail Plc CA 18-Jul-2005
The store introduced a system whereby when a customer paid by credit card, the charges made to them for card handling were expressed as a separate amount on the receipt. The store then said that VAT was payable only on the net amount allocated to . .
Lists of cited by and citing cases may be incomplete.
VAT, European
Updated: 08 April 2022; Ref: scu.179501