Category: VAT

Evita-K Eood v Obzhalvane I Upravlenie: ECJ 18 Jul 2013

ECJ Directive 2006/112/EC – Common system of value added tax – Supply of goods – Concept – Right to deduct – Refusal – Actual performance of a taxable transaction – Regulation (EC) No 1760/2000 – System for the identification and registration of bovine animals – Ear tags

R. Silva de Lapuerta P
C-78/12, [2013] EUECJ C-78/12
Bailii
Regulation (EC) No 1760/2000, Directive 2006/112/EC

European, VAT, Agriculture

Updated: 17 November 2021; Ref: scu.513410

Etat Belge v Medicom Sprl: ECJ 18 Jul 2013

ECJ Request for a preliminary rulings – Sixth VAT Directive – Article 6(2), first paragraph, point (a) and Article 13(B)(b) – Right to deduction – Capital goods belonging to legal persons made partly available to their managers for private use – No rent payable in money, but taking into account of a benefit in kind for income tax purposes

C-210/11, [2013] EUECJ C-210/11
Bailii

European, VAT

Updated: 17 November 2021; Ref: scu.513406

Hydina Sk (Administrative Cooperation and Combating Fraud In The Field of Value Added Tax (VAT) – Judgment): ECJ 30 Sep 2021

Reference for a preliminary ruling – Administrative cooperation and combating fraud in the field of value added tax (VAT) – Regulation (EU) No 904/2010 – Articles 10 to 12 – Exchange of information – Tax audit – Time limits – Suspension of the tax audit in case of exchange of information – Non-compliance with the time limits laid down for providing information – Effect on the lawfulness of the suspension of the tax audit

C-186/20, [2021] EUECJ C-186/20
Bailii
European

VAT

Updated: 17 November 2021; Ref: scu.668515

Clark v Revenue and Customs: FTTTx 19 Apr 2011

DEFAULT SURCHARGE – Reasonable excuse – Cash payment of tax due made over the counter at Bank of England – Handed over before the due date – Whether received by due date – Whether reasonable expectation it would be received by due date – Appeal allowed

[2011] UKFTT 256 (TC)
Bailii
England and Wales

VAT

Updated: 17 November 2021; Ref: scu.442967

Boehringer Ingelheim (Judgment): ECJ 6 Oct 2021

Reference for a preliminary ruling – Value added tax (VAT) – Directive 2006/112 / EC – Article 90 (1) – Reduction of the tax base in the event of a reduction in price after the time when the transaction has been carried out – Contributions paid by a pharmaceutical company to the state health insurance body – Article 273 – Administrative formalities imposed by national regulations for the exercise of the right to reduction – Principles of fiscal neutrality and proportionality

C-717/19, [2021] EUECJ C-717/19, ECLI:EU:C:2021:818
Bailii
European

VAT

Updated: 16 November 2021; Ref: scu.668537

Kings Leisure Ltd v Revenue and Customs: FTTTx 5 Feb 2016

VAT – supplies between companies associated but not in same VAT group – appellant procuring construction of mobile home bases on its own land – associated company selling mobile homes for placement on bases and paying cost of base plus commission on sale price to appellant – whether expense incurred in construction of base a cost component of any supply by appellant to associated company – whether appellant entitled to credit for input tax incurred in construction of bases – no – appeal dismissed in principle
PENALTY – misdeclaration penalty – whether properly imposed – yes – whether reasonable excuse – no – whether mitigation appropriate – no – appeal dismissed in principle

[2016] UKFTT 84 (TC)
Bailii
England and Wales

VAT

Updated: 15 November 2021; Ref: scu.559928

Peter Arnett Leisure (A Firm) v Revenue and Customs: FTTTx 19 Feb 2014

VAT – application for permission to appeal out of time – repayment claims following Rank litigation – claims formally rejected by HMRC but correspondence continued – whether permission should be granted – Data Select, O’Flaherty and Mitchell considered – held yes

[2014] UKFTT 209 (TC)
Bailii
England and Wales

VAT

Updated: 15 November 2021; Ref: scu.525230

GSTS Pathology Llp, Regina (on The Application of) v Revenue and Customs (No 2): Admn 22 Apr 2013

Leggatt J
[2013] EWHC 1823 (Admin)
Bailii
England and Wales
Cited by:
See Also – GSTS Pathology Llp, Regina (on The Application of) v Revenue and Customs Admn 22-Apr-2013
The claimant, a partnersip beween a commercial company and tow NHS hospital trusts sought an order suspending a decision that its services, the supply of pathology services to the trusts was exempt from VAT . .

Lists of cited by and citing cases may be incomplete.

VAT

Updated: 14 November 2021; Ref: scu.511221

Teritorialna Direktsia Na Natsionalnata Agentsia Za Prihodite – Plovdiv v Rodopi-M 91 OOD: ECJ 20 Jun 2013

ECJ Taxation – VAT -Directive 2006/112/EC- Principles of fiscal neutrality and proportionality – Belated recording in the accounts and declaration of the cancellation of an invoice – Remedying of the omission – Payment of the tax – State budget – No harm suffered – Administrative penalty

Jarasiunas P
C-259/12, [2013] EUECJ C-259/12
Bailii
European

VAT

Updated: 14 November 2021; Ref: scu.511016

Revenue And Customs v Newey: ECJ 20 Jun 2013

ECJ Reference for a preliminary ruling – Sixth VAT Directive – Article 2(1) and Article 6(1) – Meaning of ‘supply of services’ – Supply of advertising and loan broking services – Exemptions – Economic and commercial reality of the transactions – Abusive practices – Transactions with the sole aim of obtaining a tax advantage
The Court emphasised: ‘that a supply of services is effected ‘for consideration’, within the meaning of article 2(1) of [the Sixth] directive, and hence is taxable, only if there is a legal relationship between the provider of the service and the recipient pursuant to which there is reciprocal performance, the remuneration received by the provider of the service constituting the value actually given in return for the service supplied to the recipient’. It explained that ‘the supply of services is therefore objective in nature and applies without regard to the purpose or results of the transactions concerned and without its being necessary for the tax authorities to carry out inquiries to determine the intention of the taxable person’. The court then observed that ‘consideration of economic and commercial realities is a fundamental criterion for the application of the common system of VAT’ and that ‘the contractual position normally reflects the economic and commercial reality of the transactions’. An exception to the normal rule that the contractual relationship is central was then identified by the court as being where ‘those contractual terms constitute a purely artificial arrangement which does not correspond with the economic and commercial reality of the transactions’
. . And: ‘As regards in particular the importance of contractual terms in categorising a transaction as a taxable transaction, it is necessary to bear in mind the case law of the court according to which consideration of economic and commercial realities is a fundamental criterion for the application of the common system of VAT
Given that the contractual position normally reflects the economic and commercial reality of the transactions and in order to satisfy the requirements of legal certainty, the relevant contractual terms constitute a factor to be taken into consideration when the supplier and the recipient in a ‘supply of services’ transaction within the meaning of articles 2(1) and 6(1) of the Sixth Directive have to be identified.
It may, however, become apparent that, sometimes, certain contractual terms do not wholly reflect the economic and commercial reality of the transactions.
That is the case in particular if it becomes apparent that those contractual terms constitute a purely artificial arrangement which does not correspond with the economic and commercial reality of the transactions.’

Ilesic, P
[2013] STI 2304, [2013] EUECJ C-653/11, [2013] BVC 259, [2013] STC 2432
Bailii
European
Cited by:
Cited – Airtours Holidays Transport Ltd v Revenue and Customs SC 11-May-2016
The court was asked whether the appellant, Airtours Holidays Transport Ltd (formerly MyTravel Group plc), was entitled to recover, by way of input tax VAT charged by PricewaterhouseCoopers LLP in respect of services provided by PwC and paid for by . .
Cited – Revenue and Customs v Secret Hotels2 Ltd SC 5-Mar-2014
The Court was asked as to: ‘the liability for Value Added Tax of a company which markets and arranges holiday accommodation through an on-line website. The outcome turns on the appropriate characterisation of the relationship between the company, . .

Lists of cited by and citing cases may be incomplete.

VAT

Updated: 14 November 2021; Ref: scu.511012

Promociones Y Construcciones Bj 200 Sl: ECJ 13 Jun 2013

ECJ VAT – Directive 2006/112/EC – Article 199(1)(g) – Voluntary insolvency proceedings – Person liable for payment of tax – Liability of the person who is the recipient of certain transactions – Concept of ‘compulsory sale procedure’

Berger P
C-125/12, [2013] EUECJ C-125/12
Bailii
Directive 2006/112/EC

European, VAT

Updated: 14 November 2021; Ref: scu.511011

Galin Kostov v Direktor Na Direktsia . .: ECJ 13 Jun 2013

ECJ Common system of value added tax – Directive 2006/112/EC – Article 9(1) – Concept of ‘taxable person’ – Natural person – Taxable supply of a service – Occasional supply – Unconnected with a registered professional activity subject to VAT – Self-employed bailiff

A. Tizzano, P
C-62/12, [2013] EUECJ C-62/12
Bailii
Directive 2006/112/EC 9(1)

European, VAT

Updated: 14 November 2021; Ref: scu.511004

Revenue and Customs v Aimia Coalition Loyalty UK Ltd: SC 20 Jun 2013

Decisions about the application of the VAT system are highly dependent upon the factual situations involved. The case-law of the Court of Justice indicates that, when determining the relevant supply in which a taxable person engages, regard must be had to all the circumstances in which the transaction in question takes place. In cases where a scheme operates through a construct of contractual relationships, it is necessary to look at the matter as a whole in order to determine its economic reality.

Lord Hope, Deputy President, Lord Walker, Lord Wilson, Lord Reed, Lord Carnwath
[2013] UKSC 42, UKSC 2009/0154
Bailii, Bailii Summary, SC, SC Summary
England and Wales
Citing:
Cited – Commissioners of Customs and Excise v Redrow Group Plc HL 11-Feb-1999
Where house builders had paid the estate agents’ fees for exchanged property on sales, the supply had been, at least in part, to the builder, and the builder could accordingly recover the agents’ VAT as input tax. A supplier could be treated as . .
At VDT – Loyalty Management UK Ltd v Customs and Excise VDT 6-Apr-2005
VDT VALUE ADDED TAX – input tax – the Appellant operates the Nectar programme under which customers who purchase goods (called primary goods) from certain retailers receive points which they may use to acquire . .
At ChD – Revenue and Customs v Loyalty Management UK Ltd ChD 22-Jun-2006
The taxpayer operated a substantial loyalty reward scheme (Nectar) for assorted companies. The Revenue appealed against an order allowing the company to reclaim input VAT. The court was asked now: ‘what is the proper characteristic, for VAT . .
See Also – Revenue and Customs v Aimia Coalition Loyalty UK Ltd SC 13-Mar-2013
The company managed a card loyalty scheme for retailers. The Revenue appealed against a decision that the company could reclaim VAT input tax on the goods purchased on the customers redeeming their points. The ECJ had decided that the service . .
At ECJ – Loyalty Management UK (Taxation) ECJ 7-Oct-2010
ECJ Sixth VAT Directive – Taxable amount – Sales promotion scheme – Loyalty rewards scheme allowing customers to earn points from traders and to redeem them for loyalty rewards – Payments made by the operator of . .
ECJ Prel Ruling – Loyalty Management UK (Taxation) ECJ 7-Oct-2010
ECJ (prelimiary ruling) Sixth VAT Directive – Taxable amount – Sales promotion scheme – Loyalty rewards scheme allowing customers to earn points from traders and to redeem them for loyalty rewards – Payments made . .
Cited – Loyalty Management UK Ltd v HM Revenue and Customs CA 5-Oct-2007
The company (LMUK) managed a loyalty scheme for retailers. Their customers were awarded point sunder the schem on purchasing items, and then redeeemed those points against other purchases. LMUK sought to recover input tax on the invoices it paid to . .

Cited by:
Cited – WHA Ltd and Another v Revenue and Customs SC 1-May-2013
The Court was asked as to the effectiveness of a scheme, known as Project C, designed to minimise the overall liability to VAT of a group of companies involved in motor breakdown insurance.
Held: The court dismissed WHA’s appeal. There had . .
Cited – Lumsdon and Others, Regina (on The Application of) v Legal Services Board SC 24-Jun-2015
The appellant, barristers and solicitors, challenged the respondent’s approval of alterations to their regulatory arrangements, under Part 3 of Schedule 4 to the 2007 Act. The alterations gave effect to the Quality Assurance Scheme for Advocates . .

Lists of cited by and citing cases may be incomplete.

VAT

Updated: 14 November 2021; Ref: scu.510940

Edgeskill Ltd v Revenue and Customs: FTTTx 14 Jun 2011

VAT – INPUT TAX – HMRC denied input tax claims totalling pounds 15,294,335 in respect of 93 transactions of mobile phones – Was there a VAT Loss? – Yes – Was the loss fraudulent? – Yes – Were the Appellant’s transactions connected with the fraud? – Yes – Did the Appellant know or should have known that its transactions were connected to fraudulent evasion of VAT ? – Yes the Appellant knew – Appeal dismissed

[2011] UKFTT 393 (TC)
Bailii
England and Wales

VAT

Updated: 14 November 2021; Ref: scu.443105

Younas (T/A Micromedia Triton Communications Co UK Ltd) v Revenue and Customs: FTTTx 23 Jan 2012

VALUE ADDED TAX – input tax – denial of right to deduct on grounds of alleged knowledge or means of knowledge of fraud by others – involved in defaulter and contra-trading – whether appellants had knowledge of connection between their transactions and fraudulent evasion of VAT – yes – whether appellants should have known that only reasonable explanation for circumstances in which certain contra-trading transactions took place were that it was connected to fraudulent evasion of VAT – yes – appeal dismissed

[2012] UKFTT 194 (TC)
Bailii

VAT

Updated: 14 November 2021; Ref: scu.462580

W M Morrison Supermarkets Plc v HM Revenue and Customs: UTTC 23 May 2013

UTTC VAT – supply of disposable barbecues – whether VAT chargeable at a reduced rate on the charcoal element of the supply – reduced rate of VAT on solid fuel pursuant to Schedule 7A Group 1 Item 1(a) VATA 1994 – Commission v France Case C-94/09 considered – interaction with Card Protection Plan v C and E Case C-349/96 considered – significance of charcoal being a concrete and specific aspect of the supply – appeal dismissed.

[2013] UKUT 247 (TCC)
Bailii
England and Wales

VAT

Updated: 12 November 2021; Ref: scu.510302

Bell v Revenue and Customs: FTTTx 22 Aug 2012

PROCEDURE -applications for permission to appeal various income tax and VAT decisions out of time -appellant’s explanation for delay considered- HMRC’s conduct in asking for further information and in reducing tax demanded in context of collection proceedings did not constitute a good explanation for delay – applications dismissed

[2012] UKFTT 534 (TC)
Bailii
England and Wales

Income Tax, VAT

Updated: 12 November 2021; Ref: scu.466070

GMAC UK Plc v Revenue and Customs: FTTTx 6 May 2010

Bad debt relief – Insolvency requirement before FA 1990 – Property requirement before FA 1997 – Whether compatible with fiscal neutrality – No – Whether repayment claim resulted in windfall contrary to EC law – No – Repayment claim – Retrospective time bar under FA 1997 s.39(5) disapplied as contrary to EC law – Appeal allowed in principle

[2010] UKFTT 202 (TC)
Bailii
England and Wales

VAT

Updated: 12 November 2021; Ref: scu.422227

Commissioners of Customs and Excise v Century Life Plc: CA 19 Dec 2000

The Directive required member states to exempt from VAT, services involving the provision of insurance, and for intermediaries. Following the Regulator’s involvement, the principal company had to arrange for the checking of existing policies, and the implementation of compensation arrangements, and sub-contracted it to the taxpayer. Had the principal privided the services itself, it would have had exemption. They claimed exemption. The Act did not reflect, it was claimed, the Directive it implemented.
Held: The Act did implement the Directive correctly, albeit in more complicated language. The activity was exempt. Appeal dismissed.

The President Lord Justice Kennedy And Mr Justice Jacob
[2000] EWCA Civ 336, [2001] STC 38
Bailii
VAT Act 1994 S9 G2 P4, Sixth Directive (77/388/EEC) 13B
England and Wales
Citing:
Cited – Beloit Technologies Inc and Another v Valmet Paper Machinery Inc and Another ChD 12-May-1995
The judge urged that the Convention should be incorporated into English law without rephrasing difficult clauses: ‘it helps no-one for the Parliamentary draftsman to re-write matter in a treaty or convention (or EU directive for that matter) which . .
Mentioned – British Sugar Plc v James Roberston and Sons ChD 17-Feb-1996
The question was raised on whether, given its derivation from article 5 of the trade mark directive, non-trade mark use could be caught by sections 10(1) to (3).
Held: There was no trade mark infringement by the use of a common laudatory word. . .
Mentioned – Philips Electronics Nv v Remington Consumer Products Ltd ChD 2-Feb-1998
It was a misuse of Trade Mark legislation to seek permanently to prevent the use of a substantial engineering design idea which was underlying the mark for which protection was sought. The judge revocation of the registration of the claimant’s mark . .
Cited – Card Protection Plan Ltd v Commissioners of Customs and Excise ECJ 25-Feb-1999
A company procuring insurance purchases for credit card protection was as exempt from VAT as was the insurer. A provision which restricted the ability to claim such exemption to those registered as insurers under national was invalid under European . .
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:
Cited – Yeda Research and Development Co Ltd v Rhone-Poulenc Rorer International Holdings Inc and others CA 31-Jul-2006
The claimants sought to amend their claim which had previously been on the basis of a joint ownership, to one of sole ownership.
Held: The application for the amendment being made more han two years after the grant, the amendment could not be . .
Cited – Higgs v Regina CACD 24-Jun-2008
The defendant appealed against his conviction under the section. He ran a business fitting modifying chips to games consoles allowing them to play non-certificated games CDs.
Held: The appeal was allowed. It was not suggested that the use of a . .
Mentioned – Football Dataco Ltd and Others v Yahoo! UK Ltd and Others CA 9-Dec-2010
The claimants asserted ownership of copyright in football fixture lists as a database right. The defendant denied that they attracted any such right. The judge had found that significant skill and labour went into the preparation of the list.
VAT, European

Updated: 12 November 2021; Ref: scu.147369

Anglian Water Services Ltd v Revenue and Customs: UTTC 27 Dec 2018

VALUE ADDED TAX – repayment of output tax – section 80(3) VATA 1994 – unjust enrichment – water and sewerage infrastructure charges set by regulators – whether regulators took into account the incidence of VAT in setting the charges – evidence before the FTT – whether that evidence was probative of the decision the regulators would have taken if they had known that infrastructure charges were outside the scope of VAT – approach to admission of new evidence by Upper Tribunal – Karoulla considered

[2018] UKUT 431 (TCC)
Bailii
England and Wales

VAT

Updated: 12 November 2021; Ref: scu.632169

Revenue and Customs v University of Huddersfield: UTTC 2 Oct 2014

VALUE ADDED TAX – University making exempt supplies of education services – refurbishment of leasehold property – lease of property to trust and underlease to University of property by trust – exercise of option to treat lease and underlease as taxable – whether input tax deductible as related to taxable supply of immovable property – purpose of EU and domestic legislation – whether scheme constitutes abuse of right – appeal allowed

[2014] UKUT 438 (TCC), [2015] STC 307, [2014] BVC 537, [2014] STI 3076
Bailii
England and Wales

VAT

Updated: 12 November 2021; Ref: scu.537629

Fairford Group Plc and Another v Revenue and Customs: UTTC 23 Jul 2014

PROCEDURE – MTIC appeal – application to strike out part of appellant’s case – evidence served by respondents but no contrary evidence served by appellant – appellant requiring respondents to prove their case but advancing no positive case of its own – First-tier Tribunal refusing to strike out – whether jurisdiction to strike out – yes – whether discretion reasonably exercised – yes – guidance to FTT offered

[2014] UKUT 329 (TCC), [2015] STC 156, [2014] BVC 529
Bailii
England and Wales

VAT

Updated: 12 November 2021; Ref: scu.537621

Isle of Wight Council and Others v Revenue and Customs: UTTC 15 Oct 2014

VALUE ADDED TAX – local authorities – off-street parking – whether treatment as a non-taxable person would result in significant distortion of competition within Sixth VAT Directive art 4.5 – yes – no error of law in the findings of the FTT – appeal dismissed

[2014] UKUT 446 (TCC)
Bailii
England and Wales

VAT

Updated: 12 November 2021; Ref: scu.538014

Lane v Revenue and Customs: FTTTx 4 Oct 2013

VAT – Compulsory registration – Supplies of cleaning services to owners of holiday cottages – Contract between owners of cottages and appellant – Whether appellant supplying cleaning services itself or engaging cleaners as agent of owners – Appeal dismissed

[2013] UKFTT 521 (TC)
Bailii
England and Wales

VAT

Updated: 12 November 2021; Ref: scu.516903

Perks v Revenue and Customs: FTTTx 4 Apr 2012

VAT – Deregistration – was Commissioners’ decision not to de-register reasonable – Yes – Appeal dismissed.
VAT – Assessment – Appellant not having charged or accounted for VAT whilst being a registered person – Commissioners’ Assessment – Was it to best judgment – Yes – Appeal dismissed.
Penalty – Schedule 24 Finance Act 2008 – Appeal dismissed

[2012] UKFTT 236 (TC)
Bailii
England and Wales

VAT

Updated: 12 November 2021; Ref: scu.462710

Stanley and Another v Revenue and Customs: FTTTx 21 May 2012

VAT on medical reports for o’seas government

FTTTx VAT – Doctors providing medical examinations and reports on applicants seeking Australian immigration visas – Reports sent directly to the Department of Immigration and Multicultural Affairs in Australia – Whether doctors carried out ‘services of consultants’ or ‘other similar services’ – Whether applicant or Department of Immigration and Multicultural Affairs was the recipient of these services – Appeals dismissed

John Brooks Judge
[2012] UKFTT 375 (TC)
Bailii
England and Wales

VAT, Health Professions

Updated: 11 November 2021; Ref: scu.462767

Oxfam v Revenue and Customs: ChD 27 Nov 2009

The charity appealed against refusal to allow it to reclaim input VAT. It also sought judicial review of the decision of the Tribunal not to allow it to raise an argument of legitimate expectation. The charity had various subsidiaries conducting commercial activities, which paid VAT in its supplies. The parties disputed how input taxes were attributed between the different activitie, particularly in the context of unrestricted fundraising expenditure.
Held: The Tribunal had had power to listen to the argument on legitimate expectation. In 2000, the revenue had written to the claimant setting out the agreed calculation methods, but the law had altered on the Church of England case. However ‘in a case such as this, involving an assurance given to only one person and where there is no irrationality on the part of the public authority in adopting a different approach, the absence of detrimental reliance on the part of the person to whom the assurance is given is fatal to the argument that to modify the assurance would involve an abuse of power on the part of the public authority which gave the assurance.’

Sales J
[2009] EWHC 3078 (Ch), Times 31-Dec-2009
Bailii
Value Added Tax Act 1994 24(5), Sixth Council Directive 77/388/EEC 17
England and Wales
Citing:
Appeal from – Oxfam v Revenue and Customs VDT 30-Jul-2008
VDT VAT – INPUT TAX – Charity applying method apportioning VAT to business purposes – Church of England Children’s Society decision permitted the Appellant to recover part of VAT incurred on unrestricted . .
Cited – Gus Merchandise Corporation Ltd v Commissioners of Customs and Excise CA 24-Oct-1994
The Commissioners’ general tax management powers include a power to enter into a binding contract with taxpayers as to the method of calculation of Excess VAT paid on sales to agents was not recoverable since there was a binding agreement. . .
Cited – Revenue and Customs v The Boots Company Plc ChD 16-Mar-2009
. .
Cited – Church of England Children’s Society v Revenue and Customs ChD 29-Jul-2005
The Society sent out free newsletters to its unpaid fund-raisers and supporters. They sought to deduct input tax charged to them from the supplies associated with the costs.
Held: The Society might be able to deduct such tax as residual input . .
Cited – Kretztechnik AG v Finanzamt Linz ECJ 26-May-2005
Europa Sixth VAT Directive – Supplies for consideration – Share issue – Admission of a company to a stock exchange – Deductibility of VAT).
Kretztechnik’s objects were the development and sale of . .
Cited – Regina v Inland Revenue Commissioners, ex parte MFK Underwriting Agents Ltd CA 1990
Legitimate Expectation once created not withdrawn
The claimant said that a change of practice by the Revenue was contrary to a legitimate expectation.
Held: The Inland Revenue could not withdraw from a representation if it would cause: substantial unfairness to the applicant; if the . .
Cited – Regina v North and East Devon Health Authority ex parte Coughlan and Secretary of State for Health Intervenor and Royal College of Nursing Intervenor CA 16-Jul-1999
Consultation to be Early and Real Listening
The claimant was severely disabled as a result of a road traffic accident. She and others were placed in an NHS home for long term disabled people and assured that this would be their home for life. Then the health authority decided that they were . .
Cited – Bamber, Regina (on the Application Of) v Revenue and Customs Admn 21-Dec-2005
. .
Cited – Regina v Department of Education and Employment ex parte Begbie CA 20-Aug-1999
A statement made by a politician as to his intentions on a particular matter if elected could not create a legitimate expectation as regards the delivery of the promise after elected, even where the promise would directly affect individuals, and the . .
Cited – British Oxygen Co Ltd v Board of Trade HL 15-Jul-1970
Cylinders containing hydrogen gas were being put on a trailer pulled by a tractor for the purpose of delivery to the premises of the purchaser. One of the issues before the court was whether the function of the hydrogen trailers and the cylinders . .
Cited – Regina v Inland Revenue Commissioners, ex parte the National Federation of Self-Employed and Small Businesses Ltd HL 9-Apr-1981
Limitations on HMRC discretion on investigation
The Commissioners had been concerned at tax evasion of up to 1 million pounds a year by casual workers employed in Fleet Street. They agreed with the employers and unions to collect tax in the future, but that they would not pursue those who had . .
Cited – Mullen, Regina (on the Application of) v Secretary of State for the Home Department HL 29-Apr-2004
The claimant had been imprisoned, but his conviction was later overturned. He had been a victim of a gross abuse of executive power. The British authorities had acted in breach of international law and had been guilty of ‘a blatant and extremely . .
Cited – Regina v Inland Revenue Commission ex parte Preston; In re Preston HL 1984
Duty of Fairness to taxpayer – Written Assurance
The applicant was assured by the Inland Revenue that it would not raise further inquiries on certain tax affairs if he agreed to forgo interest relief which he had claimed and to pay a certain sum in capital gains tax.
Held: Where the . .
Cited – In Re Findlay, in re Hogben HL 1985
A public authority, and the Prison Service in particular, is free, within the limits of rationality, to decide on any policy as to how to exercise its discretions; it is entitled to change its policy from time to time for the future, and a person . .

Lists of cited by and citing cases may be incomplete.

VAT, Charity, Administrative

Updated: 11 November 2021; Ref: scu.381597

Field Fisher Waterhouse Llp v Commissioners For Her Majesty’s Revenue And Customs: ECJ 27 Sep 2012

ECJ VAT – Exemption for leasing of immovable property – Leasing of commercial premises – Services connected with the leasing – Classification of the transaction for VAT purposes – Transaction consisting of a single supply or several independent supplies

C-392/11, [2012] EUECJ C-392/11
Bailii, Gazette
European

VAT

Updated: 11 November 2021; Ref: scu.464581

A Soldier v Revenue and Customs: FTTTx 11 Jun 2012

FTTTx VAT – new means of transport – private motor car supplied for removal to Germany – bought by member of UK armed forces based in Germany and taken there for two days – returned to UK because Appellant on temporary training here before six month operational deployment in Africa – car left in the UK during deployment – during deployment, Appellant notified that his German stationing was being terminated and he was being re-based in the UK – whether Appellant had sufficient intention to remove the vehicle from the UK when initially supplied to him to qualify for UK zero rating on that supply to him – X v Skatteverket (ECJ) considered – held yes – appeal allowed

Kevin Poole Judge
[2012] UKFTT 388 (TC)
Bailii
England and Wales

VAT, Armed Forces

Updated: 11 November 2021; Ref: scu.462774

Revenue and Customs v Frank A Smart and Son Ltd: UTTC 18 Mar 2016

UTTC VALUE ADDED TAX – input tax – purchase of Single Farm Payment Entitlement units – whether used or to be used for the purposes of the taxable person’s economic activity – whether direct and immediate link with the taxable person’s business – yes – appeal refused – Council Directive 2006/112, article 168 – VATA 1994, section 24.

[2016] UKUT 121 (TCC)
Bailii
England and Wales

VAT

Updated: 11 November 2021; Ref: scu.562433

Scottish Football League v HMRC: UTTC 4 Apr 2013

UTTC Value Added Tax; supply of goods; business gift; disposal otherwise than for a consideration; supply by football association of end of season medals to league division points champion clubs; whether output tax payable on the value of such medals – yes; or whether accounted for by output on membership, sponsorship, copyright royalties, and/or broadcasting fees; no; Value Added Tax 1994 Schedule 4, paragraph 5; Principal VAT Directive 2006/112/EC Article 16.

[2013] UKUT 160 (TCC)
Bailii
England and Wales

VAT

Updated: 11 November 2021; Ref: scu.509186

Principal and Fellows of Newnham College In the University of Cambridge v Revenue and Customs: HL 16 Apr 2008

A new library had been built for the college. A company owned by the college took a lease of it from the college, and reclaimed the input tax paid on construction. The company managed the library.
Held: The Revenue’s appeal failed. The question was whether the college was in occupation of the library, either alone or together with the company. The Act could not be read as desired by the Revenue to include in the idea of occupation, any occupation of whatever nature.

Lord Hoffmann, Lord Hope of Craighead, Lord Walker of Gestingthorpe, Lord Mance and Lord Neuberger of Abbotsbury
[2008] 2 All ER 863, [2008] 16 EG 152, [2008] BTC 5330, [2008] STC 1225, [2008] STI 1231, [2008] BVC 452, [2008] NPC 45, [2008] 1 WLR 888, [2008] UKHL 23, Times 17-Apr-2008
Bailii, HL
Value Added Tax Act 1994, Finance Act 1997 37
England and Wales
Citing:
Appeal from – Newnham College Cambridge v Revenue and Customs CA 24-Mar-2006
The College had decided to demolish and rebuild its library. It elected to waive exemption to VAT so as to recover the VAT on its rebuilding costs. It had set up and funded an independent company to carry out the works, granting it a lease of the . .

Cited by:
Cited – Waterside Escapes Ltd v Revenue and Customs FTTTx 13-Oct-2020
Qualifying Property Rental – Stamp Duty Relief
SDLT – higher threshold interest 15% rate – relief for a qualifying property rental business – intention that a non-qualifying individual be permitted to occupy a dwelling on the land (paragraph 5(2), Schedule 4A, FA 2003) – whether a non-qualifying . .

Lists of cited by and citing cases may be incomplete.

VAT, Construction

Updated: 11 November 2021; Ref: scu.266935

The New Deer Community Association v Revenue and Customs: FTTTx 11 Nov 2014

FTTTx ZERO RATING – Construction – Construction of a building intended for use for a relevant charitable purpose – building described as a new pavilion – whether use as a village hall or similarly in providing social or recreational facilities for a local community – In Part – whether available to the whole community to an extent of non sporting, social or recreational use – Yes – whether limited to members of the community who participate in sport and therefore constitute a special interest group – No – Schedule 8, Group 5, Notes (2), (6) and (10), VATA 1994. Appeal allowed in part.

[2014] UKFTT 1028 (TC)
Bailii
England and Wales

Construction, Charity, VAT

Updated: 11 November 2021; Ref: scu.539023

Shelfside (Holdings) Ltd v Revenue and Customs: FTTTx 13 Apr 2012

VALUE ADDED TAX – Penalties – Schedule 24 FA2007 – inaccuracies in appellant’s partial exemption calculations – whether inaccuracies as a result of careless actions – held yes – whether special reduction appropriate – held no – whether decision not to suspend the penalties was flawed – held yes – HMRC ordered pursuant to paragraph 17(4)(a), Sch. 24, FA 2007 to suspend the penalties – appeal allowed to that extent

[2012] UKFTT 290 (TC)
Bailii
England and Wales

VAT

Updated: 11 November 2021; Ref: scu.462713

Mobilx Ltd and Others v HM Revenue and Customs; Blue Sphere Global Ltd v Same and similar: CA 12 May 2010

Each company sought repayment of input VAT. HMRC refused, saying that the transactions were the end-product of a fraud on it, and that even if the taxpayer did not know that a fraud was involved, it should have been aware that one was and acted accordingly.
Held: The court was asked whether the refusal to repay was one HMRC was entitled to within the scope of the Sixth Directive. It was. Where a trader knew or ought to have known that the transactions he was undertaking were in fact being used by others as a vehicle of fraud, he put at risk his right to reclaim VAT input tax to complete the fraud. It would not be enough to know that the transactions were more likely than not to be connected to a fraud, but rather that there was no other reasonable explanation. The test laid down by the ECJ in Kittel should not be over-elaborated. This basis would not be a disproportionate interference in the taxpayer’s rights.
Moses LJ held: ‘If a taxpayer has the means at his disposal of knowing that by his purchase he is participating in a transaction connected with fraudulent evasion of VAT he loses his right to deduct, not as a penalty for negligence, but because the objective criteria for the scope of that right are not met. It profits nothing to contend that, in domestic law, complicity in fraud denotes a more culpable state of mind than carelessness, in the light of the principle in Kittel. A trader who fails to deploy means of knowledge available to him does not satisfy the objective criteria which must be met before his right to deduct arises.’

Carnwath, Moses LJJ, Sir John Chadwick
[2010] EWCA Civ 517, [2010] WLR (D) 124, [2010] BVC 638, [2010] STC 1436, [2010] Lloyd’s Rep FC 445, [2010] STI 1589
Bailii, WLRD, Times
European Convention on Human Rights
England and Wales
Citing:
At VDT – Mobilx Ltd (In Administration) v Revenue and Customs VDT 20-May-2008
VDT VALUE ADDED TAX – input tax – right to deduct – dealer in mobile phones and computer chips – Commissioners contending that all chains of transactions in period of three months could be traced back to . .
Appeal from – Mobilx Ltd v HM Revenue and Customs ChD 3-Feb-2009
. .
At VDT – Blue Sphere Global Ltd v Revenue and Customs VDT 17-Dec-2008
VDT VAT – Input tax – MTIC fraud – whether tax loss – yes – attributable to fraudulent evasion of VAT – yes – contra-trading – whether Appellant’s purchases connected – yes – whether Appellant should have known . .
Appeal from – Blue Sphere Global Ltd v HM Revenue and Customs ChD 22-May-2009
. .
See Also – Calltel Telecom Ltd and Another v Revenue and Customs ChD 6-Jun-2008
. .
Appeal From – Calltel Telecom Ltd and Another v HM Revenue and Customs ChD 21-May-2009
Appeal against decisions by HMRC to refuse repayment of input tax in respect of claims made for that purpose – allegation of knowledge of fraudulent element elsewhere in supply chain. . .
Cited – Axel Kittel v Belgian State; Belgian State v Recolta Recycling SPRL ECJ 6-Jul-2006
ECJ Sixth VAT Directive – Deduction of input tax – ‘Carousel’ fraud – Contract of sale incurably void under domestic law.
The right of a taxpayer to deduct Input Tax may be refused if: ‘it is ascertained, . .
See also – Calltell Telecom Ltd and Another v Revenue and Customs VDT 20-Jul-2007
VDT VALUE ADDED TAX – input tax – traders’ repayment claims unpaid on grounds that Commissioners believed goods acquired had been used for missing trader intra-Community fraud – whether tax loss established – . .
Cited – Total Network Sl v Revenue and Customs HL 12-Mar-2008
The House was asked whether an action for unlawful means conspiracy was available against a participant in a missing trader intra-community, or carousel, fraud. The company appealed a finding of liability saying that the VAT Act and Regulations . .
Approved – Red 12 Trading Ltd v Revenue and Customs ChD 20-Oct-2009
Appeal against refusal to allow reclaim of input tax in case of alleged ‘Missing Trader Intracommunity Fraud’.
Held: Christopher Clarke J said: ‘Examining individual transactions on their merits does not, however, require them to be regarded . .

Cited by:
Cited – Revenue and Customs v SED Essex Ltd ChD 14-Jun-2013
Liquidator confirmed despite VAT challege
The Revenue sought the winding up of the company for non-payment of substantial arrears of VAT. The revenue had declined to allow VAT input claims. The company said that the petition was wrong since the debt was genuinely disputed.
Held: The . .
Binding – Coast Telecom Ltd v Revenue and Customs FTTTx 11-Apr-2012
Procedure – application for stay pending determination of references to CJEU – whether First-tier Tribunal bound by Mobilx – yes – whether determination of references would materially assist determination of appeal – no – whether expedient to order . .
Cited – Davis and Dann Ltd and Another v HM Revenue and Customs CA 15-Mar-2016
The Revenue appealed from rejection of its refusal to refund input tax in the basis that the company though itself innocent of VAT fraud should have understood that the transaction was part of a MTIC fraud. The court was now asked whether the Upper . .
Cited – AC (Wholesale) Ltd v Revenue and Customs (Value Added Tax) UTTC 12-May-2017
VALUE ADDED TAX – purchases of televisions – transactions connected to fraudulent loss of tax – whether taxable person should have known that its transactions were connected to fraud – whether HMRC required to prove that only reasonable explanation . .
Cited – Else Refining and Recycling Ltd v Revenue and Customs FTTTx 23-Jul-2012
VALUE ADDED TAX – MTIC – HMRC’s refusal to repay VAT on supplies connected with fraudulent VAT evasion – connection conceded by the appellant – only issues were whether the appellant knew or should have known of the connection – Axel Kittel v . .

Lists of cited by and citing cases may be incomplete.

VAT, Human Rights

Updated: 10 November 2021; Ref: scu.414901

Zaman v Revenue and Customs: FTTTx 24 Jun 2021

Value Added Tax – Penalty for Inaccuracy

VALUE ADDED TAX – Schedule 24 Finance Act 2007 – penalty for inaccuracy in VAT returns – personal liability notice on director – was there an inaccuracy in the VAT returns? – company buying and selling of alcohol held in warehouses in France and Germany – was place of supply the UK? – burden of proof on HMRC – held: not proven that place of supply was UK – appeal allowed

Zachary Citron TJ
[2021] UKFTT 228 (TC)
Bailii
England and Wales

VAT

Updated: 10 November 2021; Ref: scu.663777

Jupiter Asset Management Group Limited v Revenue and Customs: FTTTx 9 Apr 2021

Managment Services Made Between Two Vat Groups

VALUE ADDED TAX – supplies of management services made between two VAT groups within the same corporate group – whether supplies made at less than open market value – in the absence of comparable supplies, open market value was to be determined by reference to the full cost of making the supplies – that full cost included the costs incurred on goods and services used in making the supplies and also general overhead costs the input tax in respect of which had been recovered – it also included the remuneration paid to the executive directors to the extent that that remuneration related to activities performed by the executive directors in making the supplies of the management services – appeal against the output tax assessments dismissed – whether input tax on general overhead costs incurred by a holding company carrying on only the economic activity of making supplies of management services recoverable – yes

[2021] UKFTT 96 (TC)
Bailii
England and Wales

VAT

Updated: 10 November 2021; Ref: scu.663706

Puffer v Unabhangiger Finanzsenat Aussenstelle Linz (Approximation Of Laws): ECJ 11 Dec 2008

Mixed Use – VAT on construction Costs

Europa VAT – Building used partly for private purposes and partly for taxable business purposes – Right to deduct input tax on construction costs – Allocation to business use with immediate deduction of all input tax and private use subject to output tax, or pro rata deduction of input tax according to proportions of business and private use – Equal treatment – Validity of national exclusion from right to deduct.

C-460/07, [2008] EUECJ C-460/07, [2009] EUECJ C-460/07
Bailii, Bailii
European

VAT, Construction

Updated: 10 November 2021; Ref: scu.278692

Axel Kittel v Belgian State; Belgian State v Recolta Recycling SPRL: ECJ 6 Jul 2006

ECJ Sixth VAT Directive – Deduction of input tax – ‘Carousel’ fraud – Contract of sale incurably void under domestic law.
The right of a taxpayer to deduct Input Tax may be refused if: ‘it is ascertained, having regard to objective factors, that the taxable person knew or should have known that, by his purchase, he was participating in a transaction connected with fraudulent evasion of VAT.’
Where it is ascertained, having regard to objective factors, that a recipient of a supply of goods is a taxable person who knew or should have known that, by his purchase, he was participating in a transaction connected with fraudulent evasion of VAT, it is for the national court to refuse that taxable person entitlement to the right to deduct VAT he has paid: ‘an analysis of the terms ‘supply of goods effected by a taxable person acting as such’ and ‘economic activities’ shows that those terms, which define taxable transactions for the purposes of the Sixth Directive, are objective in nature and apply without regard to the purpose or results of the transactions concerned (see, to that effect, Joined Cases C-354/03, C-355/03 and C-484/03 Optigen [2006] Ch 218, paras. 43 and 44).
traders who take every precaution which could reasonably be required of them to ensure that their transactions are not connected with fraud . . must be able to rely on the legality of those transactions without the risk of losing their right to deduct the input VAT (see, to that effect, Case C-384/04 Federation of Technological Industries [2006] STC 1483, para. 33).
By contrast, the objective criteria which form the basis of the concepts of ‘supply of goods effected by a taxable person acting as such’ and ‘economic activity’ are not met where tax is evaded by the taxable person himself (see Case C-255/02 Halifax and Others [2006] Ch 387, paras. 59).
Where the tax authorities find that the right to deduct has been exercised fraudulently, they are permitted to claim repayment of the deducted sums retroactively (see, inter alia, Case 268/83 Rompelman [1985] 2 CMLR 202, para. 24; Case C-110/94 INZO [1996] STC 569, para. 24; and Joined Cases C-110/98 to C-147/98 Gabalfrisa [2002] STC 535, para. 46) . .
a taxable person who knew or should have known that, by his purchase, he was taking part in a transaction connected with fraudulent evasion of VAT must, for the purposes of the Sixth Directive, be regarded as a participant in that fraud, irrespective of whether or not he profited by the resale of the goods.
That is because in such a situation the taxable person aids the perpetrators of the fraud and becomes their accomplice.
In addition, such an interpretation, by making it more difficult to carry out fraudulent transactions, is apt to prevent them.
Therefore, it is for the referring court to refuse entitlement to the right to deduct where it is ascertained, having regard to objective factors, that the taxable person knew or should have known that, by his purchase, he was participating in a transaction connected with fraudulent evasion of VAT, and to do so even where the transaction in question meets the objective criteria which form the basis of the concepts of ‘supply of goods effected by a taxable person acting as such’ and ‘economic activity”

C-439/04, [2006] EUECJ C-439/04
Bailii
European
Citing:
See Also – Axel Kittel v Belgian State; Belgian State v Recolta Recycling SPRL C-440/04 ECJ 6-Jul-2006
ECJ Sixth VAT Directive – Deduction of input tax – ‘Carousel’ fraud – Contract of sale incurably void under domestic law. . .

Cited by:
Cited – Mobilx Ltd and Others v HM Revenue and Customs; Blue Sphere Global Ltd v Same and similar CA 12-May-2010
Each company sought repayment of input VAT. HMRC refused, saying that the transactions were the end-product of a fraud on it, and that even if the taxpayer did not know that a fraud was involved, it should have been aware that one was and acted . .
Cited – Revenue and Customs v SED Essex Ltd ChD 14-Jun-2013
Liquidator confirmed despite VAT challege
The Revenue sought the winding up of the company for non-payment of substantial arrears of VAT. The revenue had declined to allow VAT input claims. The company said that the petition was wrong since the debt was genuinely disputed.
Held: The . .
Cited – Else Refining and Recycling Ltd v Revenue and Customs FTTTx 23-Jul-2012
VALUE ADDED TAX – MTIC – HMRC’s refusal to repay VAT on supplies connected with fraudulent VAT evasion – connection conceded by the appellant – only issues were whether the appellant knew or should have known of the connection – Axel Kittel v . .
Cited – Microring Ltd v Revenue and Customs (Value Added Tax – Kittel Denial of Input Tax) FTTTx 12-Jul-2019
VALUE ADDED TAX — Kittel denial of input tax – strike out applications – whether issue estoppel applies – no – whether HMRC should be barred from part of the proceedings – no – – whether Appellant’s appeal should be struck out in part – no – . .

Lists of cited by and citing cases may be incomplete.

VAT

Leading Case

Updated: 10 November 2021; Ref: scu.243021

Royal Troon Golf Club v Revenue and Customs: FTTTx 17 Mar 2015

FTTTx VAT – whether a supply by an unincorporated association to its members is a taxable supply by a taxable person – yes – whether an unincorporated association is distinguishable from its members when making supplies -yes – whether supplies are non-taxable because consumed by members of an unincorporated association in a private capacity – no. Article 2.1 VAT Directive 2006/112/EC and Section 94 (2) Value Added Tax Act 1994. Appeal dismissed.

[2015] UKFTT 121 (TC)
Bailii
England and Wales

VAT

Updated: 10 November 2021; Ref: scu.544593

British Eventing Ltd v Revenue and Customs: FTTTx 17 Aug 2010

FTTTx VAT – Appellant paying reverse premium on assignment of lease – whether locus standi to challenge taxable status of reverse premium and/or recover VAT paid on it; whether reverse premium attributable to assignment of lease and, if not, to what; whether HMRC’s decision to refuse permission to opt leased property wrong in law.

[2010] UKFTT 382 (TC)
Bailii
England and Wales

VAT, Landlord and Tenant

Updated: 10 November 2021; Ref: scu.422348

Hopkins v Revenue and Customs: FTTTx 19 Apr 2012

Value Added Tax Act 1994 (VATA), Schedule 8, Group 5, Note 2. Refund to persons constructing certain dwellings – residential conversion – separate use or disposal of the dwelling was prohibited by the terms of the statutory planning consent at the time the conversion was designed – thus works were not eligible. Appeal dismissed.

[2012] UKFTT 260 (TC)
Bailii
England and Wales

VAT

Updated: 10 November 2021; Ref: scu.462683

The Oxbridge Research Group Ltd v Revenue and Customs: FTTTx 12 Apr 2012

DEFAULT SURCHARGE- Proportionality – Electronic return stating due date for payment – Payment by cheque one day late – Held no reasonable excuse – Whether penalty over pounds 8,000 disproportionate – Whether jurisdiction to consider particular case as opposed to system – Yes – Held particular surcharge not disproportionate – VATA 1994 s.25(1) – VAT Reg 25(1). 25A and 40 – Appeal dismissed.

[2012] UKFTT 261 (TC)
Bailii
England and Wales

VAT

Updated: 09 November 2021; Ref: scu.462706

Pendragon Plc and Others v HM Revenue and Customs: CA 23 Jul 2013

The Revenue had imposed a penalty on the appellants saying that their arrangement for the sale and VAT taxation of demonstrator cars was, in European law terms. The taxpayer sought re-instatment of the First Tier Tribunal judgment in its favour.
Held: The appeal succeeded: ‘the First-Tier Tribunal was entitled, on a comprehensive objective evaluation of the arrangements, to come to the conclusion that no element of the arrangement was inserted artificially, and that the arrangements were not abusive or artificial.’
Lloyd LJ summarised the scheme: ‘Step 1. Pendragon plc, having bought new cars from, say, Ford, sold new cars which were destined for use as demonstrator cars, before sale to a consumer, to Captive Cos 1, 2, 3 and 4 (‘the Captive Leasing Companies’ or CLCs). (In fact only three companies were used, but I use the language which has been used elsewhere to describe the Scheme, in order not to generate unnecessary confusion.) Pendragon plc’s sale of the cars to a CLC was a taxable supply of goods for VAT purposes. Therefore, Pendragon plc accounted for output tax on the sale of the cars; and reclaimed input tax, including the tax incurred on the purchase from Ford.
Step 2. On the same day as Step 1, the Captive Leasing Companies leased the cars pursuant to hybrid HP/lease agreements to dealership companies in the Pendragon Group (‘the Dealerships’). Each of the Captive Leasing Companies entered into a ‘Vehicle Demonstrator Hire Agreement’ (referred to as a hybrid lease) in favour of the Dealerships. Paragraph 8(c) of Second Schedule to the hybrid leases (generally referred to as clause 8(c), as I will refer to it hereafter, so as to avoid confusion) conferred on the Dealership an option to purchase the hired vehicles. The option was exercisable seven days after the end of the hire agreement, and not earlier.
The services provided by the Captive Leasing Companies to the Dealerships under the Vehicle Demonstrator Hire Agreement were taxable supplies at the standard rate of VAT. Input tax incurred by the Captive Leasing Companies on the purchase of the vehicles from Pendragon plc at Step 1 was therefore fully recoverable, being attributable to the making of those taxable supplies of leasing to the Dealerships. The Dealerships incurred VAT on the rental payments but recovered that VAT in full, being attributable to their taxable sale activities.
Step 3. On the day following Steps 1 and 2, the Captive Leasing Companies began assigning the hybrid lease agreements and title in the cars to SG Hambros Bank and Trust (Jersey) Ltd, known in the case as Soc Gen Jersey (SGJ), which was resident in Jersey, not in the UK. Each of the Captive Leasing Companies entered into a Deed of Assignment with SGJ. SGJ paid the Captive Leasing Companies the sum of approximately andpound;20m. On the same date, SGJ had entered into a facility agreement with its parent company in the UK, SG London, in relation to the facility of andpound;20m to finance the assignments. SGJ granted SG London an assignment of the assets to be assigned to it, as a form of security.
This step was critical to the success of the Scheme. It depended on the assignment of a lease, granted by a Captive Leasing Company to a Pendragon dealership, to a bank; according to HMRC this had to be an offshore bank, as it in fact was. No VAT was due on this transaction. The assignment by the Captive Leasing Companies to SGJ was not a supply for VAT purposes, by virtue of article 5(4) of the Special Provisions Order, which ‘de-supplied’ it, ie treated it as neither a supply of goods nor a supply of services.
Step 4. On a date envisaged as being some 30 to 45 days later, SGJ transferred as a going concern the lease agreements and title in the cars to Captive Co 5. Captive Co 5 resolved to purchase the relevant ‘hire business’ carried on by SGJ. On the same day, SGJ contracted with Captive Co 5 to sell to it the business of the hire of cars said to have been carried on by SGJ. The consideration was in excess of andpound;18m and was apportioned as to andpound;100,000 for the sale of goodwill and as to the balance (save for andpound;2) for the sale of the motor vehicles. That agreement was completed on the same date, and Captive Co 5 paid the agreed price to SGJ.
The sale by SGJ to Captive Co 5 of its ‘hire business’ was the transfer of a business as a going concern (TOGC). As such the transaction was neither a supply of goods nor a supply of services; therefore no VAT was due on this transaction.
Step 5. On various dates thereafter, the cars were sold to customers by the Dealerships, acting as undisclosed agents for Captive Co 5 in which title to the vehicles was vested. VAT was charged to the purchasers on the seller’s profit margin on the sale, rather than on the total sale price, Captive Co 5 having opted to apply the margin scheme.
When Captive Co 5 sold the vehicles to the retail customer, the Cars Order applied. The tax relief provided for by article 8 of that Order applied only where the taxable person making the sale had come into possession of the car in the circumstances set out in article 8(2), which I will set out below. If those requirements were met, and if the option was exercised that the margin scheme should apply, then VAT was due only on the profit margin on the supply, rather than on the whole value received for the supply. This meant that Captive Co 5 accounted for VAT on the difference between the cost of the car on the purchase from SGJ, and the price at which it sold the car to the consumer. By means of the de-supplied assignment of the leases to SGJ at Step 3, and the TOGC from SGJ at Step 4, the Scheme was designed to meet the taxation requirements of the Cars Order.’

Lloyd, Lewison, Gloster LJJ
[2013] EWCA Civ 868, [2014] STC 844, [2013] STI 2568, [2013] BVC 414
Bailii
First Council Directive on VAT, 67/227/EEC 2, VAT (Cars) (Amendment) Order 1995 SI 1995/1269, VAT (Cars) Amendment) Order 1997 SI 1997/1615
England and Wales
Citing:
Appeal from – HM Revenue and Customs v Pendragon UTTC 15-Mar-2012
UTTC VALUE ADDED TAX – margin scheme for second-hand goods – arrangement by which motor dealer raised finance and became able to sell demonstrator cars within margin scheme – whether abusive – yes – appeal . .
At FTT – Pendragon Plc and Others v Revenue and Customs FTTTx 31-Jul-2009
FTTTx VAT- financing involving sale of business – Abuse? No financing transaction as going concern which gave margin treatment – Appeal allowed . .
Cited – Halifax plc etc v Commissioners of Customs and Excise ECJ 21-Feb-2006
ECJ Sixth VAT Directive – Article 2(1), Article 4(1) and (2), Article 5(1) and Article 6(1) – Economic activity – Supplies of goods – Supplies of services – Abusive practice – Transactions designed solely to . .
Cited – Ministero dell’Economia e delle Finanze v Part Service Srl ECJ 21-Feb-2008
ECJ Sixth VAT Directive Articles 11A(1)(a) and 13B(a) and (d) – Leasing – Artificial division of the supply into a number of parts – Effect Reduction of the taxable amount – Exemptions – Abusive practice . .
Cited – HM Revenue and Customs v Weald Leasing (Taxation) ECJ 2-Dec-2010
ECJ Sixth VAT Directive – Concept of ‘abusive practice’ – Leasing transactions effected by a group of undertakings to spread the payment of non-deductible VAT . .
Cited – WHA Ltd and Another v Revenue and Customs SC 1-May-2013
The Court was asked as to the effectiveness of a scheme, known as Project C, designed to minimise the overall liability to VAT of a group of companies involved in motor breakdown insurance.
Held: The court dismissed WHA’s appeal. There had . .
Cited – Helena Partnerships Ltd v HM Revenue and Customs CA 9-May-2012
The company had undertaken substantial building works and sought associated tax relief. The court was asked whether, following a change in the company’s memorandum and articles of association, the company, a registered social landlord, remained a . .
Cited – Mirror Group plc v Commissioners of Customs and Excise, Cantor Fitzgerald International v Same ECJ 9-Oct-2001
A potential lessee who did not have an interest in immovable property agreed to take a lease in return for money paid by the landlord. The transaction was not exempt from value-added tax under article 13(B)(b) as ‘the leasing or letting of immovable . .
Cited – Tesco Plc v Customs and Excise Commissioners CA 14-Oct-2003
The taxpayer had a loyalty scheme under which they issued vouchers to shoppers who had purchased goods to a certain value. They sought to deduct the sums when accounting for VAT.
Held: Upon earning 150 loyalty points in a quarter, vouchers . .

Cited by:
At CA – Revenue and Customs v Pendragon Plc and Others SC 10-Jun-2015
‘This appeal is about an elaborate scheme designed and marketed by KPMG relating to demonstrator cars used by retail distributors for test drives and other internal purposes. In the ordinary course, a car distributor will buy new cars for use as . .

Lists of cited by and citing cases may be incomplete.

VAT, European

Updated: 09 November 2021; Ref: scu.513554

Halifax plc etc v Commissioners of Customs and Excise: ECJ 21 Feb 2006

ECJ Sixth VAT Directive – Article 2(1), Article 4(1) and (2), Article 5(1) and Article 6(1) – Economic activity – Supplies of goods – Supplies of services – Abusive practice – Transactions designed solely to obtain a tax advantage.
The court set out the principle of abuse of right, saying: ‘in the sphere of VAT, an abusive practice can be found to exist only if, first, the transactions concerned, notwithstanding formal application of the conditions laid down by the relevant provisions of the Sixth Directive and the national legislation transposing it, result in the accrual of a tax advantage the grant of which would be contrary to the purpose of those provisions.
Second, it must also be apparent from a number of objective factors that the essential aim of the transactions concerned is to obtain a tax advantage. As the Advocate General observed in paragraph 89 of his opinion, the prohibition of abuse is not relevant where the economic activity carried out may have some explanation other than the mere attainment of tax advantages.’
. . And: ‘I am of the view therefore that the Community law notion of abuse, applicable to the VAT system, operates on the basis of a test comprising two elements. Both elements must be present in order to establish the existence of an abuse of Community law in this area. The first corresponds to the subjective element mentioned by the Court in Emsland [2000] ECR I-11569, but it is subjective only in so far as it aims at ascertaining the purpose of the activities in question. That purpose – which must not be confused with the subjective intention of the participants in those activities – is to be objectively determined on the basis of the absence of any other economic justification for the activity than that of creating a tax advantage. Accordingly, this element can be regarded as an element of autonomy. In fact, when applying it, the national authorities must determine whether the activity at issue has some autonomous basis which, if tax considerations are left aside, is capable of endowing it with some economic justification in the circumstances of the case.’

V Skouris, P
[2006] BVC 377, [2006] 2 WLR 905, [2006] 2 CMLR 36, [2006] STI 501, [2005] EUECJ C-255/02, Times 27-Feb-2006, [2006] Ch 387, [2006] ECR I-1609, [2006] BTC 5308, ECLI:EU:C:2006:121, [2006] STC 919, [2006] CEC 690
Bailii
European
Cited by:
Cited – Oracle America Inc v M-Tech Data Ltd SC 27-Jun-2012
The appellant complained that the respondent had imported into the European Economic Area disk drives bearing its trade marks in breach of the appellant’s rights. The respondent had argued that the appellant had abused its position by withholding . .
Cited – Weald Leasing Ltd v Revenue and Customs VDT 6-Feb-2007
VDT VAT – AVOIDANCE – Abuse of rights – Appellant associate of exempt trader purchasing assets to lease to separate company to lease on to exempt trader – Associate outside VAT group – Associate credited with . .
Cited – HM Revenue and Customs v Weald Leasing Ltd ChD 16-Jan-2008
. .
Cited – Ministero dell’Economia e delle Finanze v Part Service Srl ECJ 21-Feb-2008
ECJ Sixth VAT Directive Articles 11A(1)(a) and 13B(a) and (d) – Leasing – Artificial division of the supply into a number of parts – Effect Reduction of the taxable amount – Exemptions – Abusive practice . .
Cited – Weald Leasing (Taxation) ECJ 26-Oct-2010
ECJ Opinion – Value added tax (VAT) – Sixth Council Directive 77/388/EEC – Concept of ‘abusive practice’ and ‘normal commercial operations’ – Transaction designed solely to obtain a tax advantage – Leasing and . .
Cited – HM Revenue and Customs v Weald Leasing (Taxation) ECJ 2-Dec-2010
ECJ Sixth VAT Directive – Concept of ‘abusive practice’ – Leasing transactions effected by a group of undertakings to spread the payment of non-deductible VAT . .
Cited – Pendragon Plc and Others v HM Revenue and Customs CA 23-Jul-2013
The Revenue had imposed a penalty on the appellants saying that their arrangement for the sale and VAT taxation of demonstrator cars was, in European law terms. The taxpayer sought re-instatment of the First Tier Tribunal judgment in its favour.
Cited – Revenue and Customs v Pendragon Plc and Others SC 10-Jun-2015
‘This appeal is about an elaborate scheme designed and marketed by KPMG relating to demonstrator cars used by retail distributors for test drives and other internal purposes. In the ordinary course, a car distributor will buy new cars for use as . .
Cited – Revenue and Customs v The Rank Group Plc SC 8-Jul-2015
The question raised by this appeal is whether, during the period 1 October 2002 to 5 December 2005, the takings on a particular category of gaming machines operated by the appellants were subject to VAT. The answer depends on whether the takings . .
Cited – Revenue and Customs v Secret Hotels2 Ltd SC 5-Mar-2014
The Court was asked as to: ‘the liability for Value Added Tax of a company which markets and arranges holiday accommodation through an on-line website. The outcome turns on the appropriate characterisation of the relationship between the company, . .

Lists of cited by and citing cases may be incomplete.

VAT

Leading Case

Updated: 09 November 2021; Ref: scu.238842

Sc Gran Via Moinesti Srl v Agentia Nationala De Administrare Fiscala (Anaf): ECJ 29 Nov 2012

ECJ Directive 2006/112/EC – Value added tax – Articles 167, 168 and 185 – Right of deduction – Adjustment of deductions – Acquisition of land and buildings constructed on that land, with a view to demolishing the buildings and carrying out a construction project on the land.

C-257/11, [2012] EUECJ C-257/11
Bailii
Directive 2006/112/EC 167 168 185
European

European, VAT

Updated: 09 November 2021; Ref: scu.466427

Total Network Sl v Revenue and Customs: HL 12 Mar 2008

The House was asked whether an action for unlawful means conspiracy was available against a participant in a missing trader intra-community, or carousel, fraud. The company appealed a finding of liability saying that the VAT Act and Regulations contained the entire regime.
Held: Criminal conduct at common law or by statute can constitute unlawful means in an unlawful means conspiracy. The protection of the Bill of Rights is available to everyone. Fraudsters and cheats are as much entitled to be protected against the levying of taxes without the authority of Parliament as anyone else. The function of an action of damages is to provide a remedy for interests that are recognised by the law as entitled to protection
‘The statute makes no provision for the recovery of VAT from someone who is not a taxable person within the meaning of section 3. There is, it may be said, a gap in the statute. But this does not mean that the Commissioners have suffered a loss for which they can sue in damages. All that can be said is that payment was made to Alldech which ought not to have been made. It is an amount that can be recovered as a debt due to the Crown from Alldech. It does not change its character as a debt due to the Crown because, when it is sought to be recovered from someone else, it is described as damages. ‘
Lord Scott said: ‘there is, in my opinion, nothing whatever in the Bill of Rights point. It is true that Total are not taxable under the statutory VAT scheme in respect of any of the pleaded transactions, but the claim against Total is not a claim for tax. It is a claim for damages, for loss, caused by the fraudulent conspiracy.’

Lord Hope of Craighead, Lord Scott of Foscote, Lord Walker of Gestingthorpe, Lord Mance, Lord Neuberger of Abbotsbury
[2008] UKHL 19, [2008] BPIR 699, [2008] 2 WLR 711, [2008] STI 938, [2008] 1 AC 1174, [2008] STC 644, [2008] BVC 340, [2008] BTC 5216
Bailii, HL
Value Added Tax Act 1994 1(1) 7, Bill of Rights 1688 4
England and Wales
Citing:
Cited – Total Network Sl v Customs and Excise Commissioners CA 31-Jan-2007
The defendants suspected a carousel VAT fraud. The defendants appealed a finding that there was a viable cause of action alleging a ‘conspiracy where the unlawful means alleged is a common law offence of cheating the public revenue’. The defendants . .
Cited – Gosling v Veley 1850
Wilde CJ said: ‘The rule of law that no pecuniary burden can be imposed upon the subjects of this country, by whatever name it may be called, whether tax, due, rate, or toll, except under clear and distinct legal authority, established by those who . .
Cited – Attorney-General v Wilts United Dairies Ltd CA 1921
The Food Controller had been given power under the Defence of the Realm Acts to regulate milk sales. In granting the dairy a licence to buy milk in Cornwall, Devon, Dorset and Somerset, the Food Controller required the Dairy to pay 2d. per imperial . .
Cited – Attorney-General v Wilts United Dairies Ltd HL 1922
The House heard an appeal by the Attorney-General against a finding that an imposition of duty on milk sales was unlawful.
Held: The appeal failed. The levy was unlawful. Lord Buckmaster said: ‘Neither of those two enactments enabled the Food . .
Cited – Inland Revenue Commissioners v Hambrook 1956
The Revenue claimed for loss resulting from its being deprived of the services of a taxing officer due to a vehicle accident.
Held: The action was dismissed. An action for that kind of loss did not lie where its relationship was with an . .
Cited – Autologic Holdings Plc and others v Commissioners of Inland Revenue HL 28-Jul-2005
Taxpayer companies challenged the way that the revenue restricted claims for group Corporation Tax relief for subsidiary companies in Europe. The issue was awaiting a decision of the European Court. The Revenue said that the claims now being made by . .
Cited – Lonrho Ltd v Shell Petroleum Co Ltd (No 2) HL 1-Apr-1981
No General Liability in Tort for Wrongful Acts
The plaintiff had previously constructed an oil supply pipeline from Beira to Mozambique. After Rhodesia declared unilateral independence, it became a criminal offence to supply to Rhodesia without a licence. The plaintiff ceased supply as required, . .
Cited – Lonrho Ltd v Shell Petroleum Co Ltd (No 2) CA 6-Mar-1981
Lonrho had supplied oil to Southern Rhodesia. It gave up this profitable business when the UK imposed sanctions on that country. It claimed that Shell had conspired unlawfully to break the sanctions, thereby prolonging the illegal regime in Southern . .
Cited – Marrinan v Vibart CA 1962
The court considered an action in the form an attempt to circumvent the immunity of a witness at civil law by alleging a conspiracy.
Held: The claim was rejected. The court considered the basis of the immunity from action given to witnesses. . .
Cited – Crofter Hand Woven Harris Tweed Company Limited v Veitch HL 15-Dec-1941
The plaintiffs sought an interdict against the respondents, a dockers’ union, who sought to impose an embargo on their tweeds as they passed through the port of Stornoway.
Held: A trade embargo was not tortious because the predominant purpose . .
Cited – Crofter Hand Woven Harris Tweed Co Ltd v Veitch SCS 1940
Lord Justice Clerk Aitchison said: ‘When the end of a combination is not a crime or a tort in the accepted sense, and the means are not in the accepted sense criminal or tortious – cases which give rise to no difficulty – the question always is – . .
Cited – Allen v Flood HL 14-Dec-1898
Tort of Malicicious Inducement not Committed
Mr Flood had in the course of his duties as a trade union official told the employers of some ironworkers that the ironworkers would go on strike, unless the employers ceased employing some woodworkers, who the ironworkers believed had worked on . .
Cited – Sorrell v Smith HL 1925
Torts of Conspiracy by Unlawful Means
The plaintiff had struck the first blow in a commercial battle between the parties, and the defendant then defended himself, whereupon the plaintiff sued him.
Lord Cave quoted the French saying: ‘cet animal est tres mechant; quand on . .
Cited – Hargreaves v Bretherton 1959
The Plaintiff pleaded that the First Defendant police officer had falsely and maliciously and without justification or excuse committed perjury at the Plaintiff’s trial on charges of criminal offences and that as a result the Plaintiff had been . .
Cited – Quinn v Leathem HL 5-Aug-1901
Unlawful Means Conspiracy has two forms
Quinn was treasurer of a Belfast butchers’ association. Leathem, who traded as a butcher, employed some non-union men, although when the union made difficulties he asked for them to be admitted to the union, and offered to pay their dues. The union . .
Cited – Douglas and others v Hello! Ltd and others; similar HL 2-May-2007
In Douglas, the claimants said that the defendants had interfered with their contract to provide exclusive photographs of their wedding to a competing magazine, by arranging for a third party to infiltrate and take and sell unauthorised photographs. . .
Cited – Snook v London and West Riding Investments Ltd CA 1967
Sham requires common intent to create other result
The court considered a claim by a hire-purchase company for the return of a vehicle. The bailee said the agreement was a sham.
Held: The word ‘sham’ should only be used to describe an act or document where the parties have a common intention . .
Cited – Optigen Ltd, Fulcrum Electronics Ltd, Bond House Systems Ltd v Commissioners of Customs and Excise ECJ 12-Jan-2006
ECJ Sixth VAT Directive – Article 2(1), Article 4(1) and (2) and Article 5(1) – Deduction of input tax – Economic activity – Taxable person acting as such – Supply of goods – Transaction forming part of a chain . .
Cited – Mogul Steamship Company Limited v McGregor Gow and Co QBD 10-Aug-1885
Ship owners formed themselves into an association to protect their trading interests which then caused damage to rival ship owners. The plaintiffs complained about being kept out of the conference of shipowners trading between China and London.
Cited – Yukong Lines Ltd v Rendsburg Investments Corporation and Others (No 2) QBD 23-Sep-1997
Repudiation by charterer: Funds were transferred by a charterer’s ‘alter ego’ to another company controlled by him with intent to defeat owner’s claim – whether ‘alter ego’ acting as undisclosed principal of charterer – whether permissible to pierce . .
Cited – Mbasogo, President of the State of Equatorial Guinea and Another v Logo Ltd and others CA 23-Oct-2006
Foreign Public Law Not Enforceable Here
The claimant alleged a conspiracy by the defendants for his overthrow by means of a private coup d’etat. The defendants denied that the court had jurisdiction. The claimants appealed dismissal of their claim to damages.
Held: The claims were . .
Cited – Regina v Clarence CCCR 20-Nov-1888
The defendant knew that he had gonorrhea. He had intercourse with his wife, and infected her. She would not have consented had she known. He appealed his convictions for assault and causing grievous bodily harm.
Held: ‘The question in this . .
Cited – Cutler v Wandsworth Stadium Ltd HL 1949
The Act required the occupier of a licensed racetrack to take all steps necessary to secure that, so long as a totalisator was being lawfully operated on the track, there was available for bookmakers space on the track where they could conveniently . .
Cited – Rookes v Barnard (No 1) HL 21-Jan-1964
The court set down the conditions for the award of exemplary damages. There are two categories. The first is where there has been oppressive or arbitrary conduct by a defendant. Cases in the second category are those in which the defendant’s conduct . .
Cited – Daily Mirror Newspapers Ltd v Gardner CA 1968
The Federation of Retail Newsagents decided to boycott the Daily Mirror for a week to persuade its publishers to pay higher margins, and advised them accordingly. The publishers sought an injunction saying the Federation was procuring a breach of . .
Doubted – Michaels and Michaels v Taylor Woodrow Developments Ltd, etc ChD 19-Apr-2000
The respondents sought to strike out the claim for conspiracy and failure to comply with the Act. The respondent was landlord of premises occupied by the claimants. They had served a notice under the Act of their intention to sell.
Held: The . .
Cited – Surzur Overseas Ltd v Koros and others CA 25-Feb-1999
A defendant to a worldwide Mareva injunction had failed to give full disclosure of all his assets in an affidavit filed with the court. False evidence as to sale of the assets in question was later manufactured and placed before the court. The . .
Cited – Inland Revenue Commissioners v Goldblatt 1972
In a winding up case, the Commissioners can if necessary proceed against a receiver for misfeasance. . .
Cited – Ex parte Island Records CA 1978
An injunction is available to any person who can show that a private right or interest has been interfered with by a criminal act. . .
Cited – RCA Corporation v Pollard CA 1982
The illegal activities of bootleggers who had made unauthorised recordings of concerts, diminished the profitability of contracts granting to the plaintiffs the exclusive right to exploit recordings by Elvis Presley.
Held: The defendant’s . .
Cited – W T Ramsay Ltd v Inland Revenue Commissioners HL 12-Mar-1981
The taxpayers used schemes to create allowable losses, and now appealed assessment to tax. The schemes involved a series of transactions none of which were a sham, but which had the effect of cancelling each other out.
Held: If the true nature . .
Cited – Oren, Tiny Love Limited v Red Box Toy Factory Limited, Red Box Toy (UK) Limited, Index Limited, Martin Yaffe International Limited, Argos Distributors Limited PatC 1-Feb-1999
One plaintiff was the exclusive licensee of a registered design. The defendant sold articles alleged to infringe the design right. The registered owner had a statutory right to sue for infringement. But the question was whether the licensee could . .
Cited – Regina v Mavji CACD 1987
The court considered the offence of cheating the public revenue.
Held: Cheating might include any form of fraudulent conduct which resulted in diverting money from the revenue and depriving the revenue of money to which it was entitled. . .
Cited – Metall und Rohstoff AG v Donaldson Lufkin and Jenrette Inc CA 1990
There was a complicated commercial dispute involving allegations of conspiracy. A claim by the plaintiffs for inducing or procuring a breach of contract would have been statute-barred in New York.
Held: Slade LJ said: ‘The judge’s approach to . .
Cited – Rex v Bainbridge 1782
. .
Cited – Regina v Hudson 1956
To avoid the payment of tax by positive false representations constitutes a fraud on the Crown and a fraud on the public. It is a common law offence and is indictable as such. . .
Cited – Woolwich Equitable Building Society v Inland Revenue Commissioners (2) HL 20-Jul-1992
The society had set out to assert that regulations were unlawful in creating a double taxation. It paid money on account of the tax demanded. It won and recovered the sums paid, but the revenue refused to pay any interest accrued on the sums paid. . .
Cited – Deutsche Morgan Grenfell Group Plc v Inland Revenue and Another HL 25-Oct-2006
The tax payer had overpaid Advance Corporation Tax under an error of law. It sought repayment. The revenue contended that the claim was time barred.
Held: The claim was in restitution, and the limitation period began to run from the date when . .
Cited – Commissioners of Customs and Excise, Attorney General v Federation of Technological Industries and Others ECJ 11-May-2006
ECJ (Taxation) C-197/03 Sixth VAT Directive – Articles 21(3) and 22(8) – National measures to combat fraud – Joint and several liability for the payment of VAT – Provision of security for VAT payable by another . .
Cited – Henderson v Merrett Syndicates Ltd HL 25-Jul-1994
Lloyds Agents Owe Care Duty to Member; no Contract
Managing agents conducted the financial affairs of the Lloyds Names belonging to the syndicates under their charge. It was alleged that they managed these affairs with a lack of due careleading to enormous losses.
Held: The assumption of . .
Cited – Marcic v Thames Water Utilities Limited HL 4-Dec-2003
The claimant’s house was regularly flooded by waters including also foul sewage from the respondent’s neighbouring premises. He sought damages and an injunction. The defendants sought to restrict the claimant to his statutory rights.
Held: The . .
Cited – Johnson v Unisys Ltd HL 23-Mar-2001
The claimant contended for a common law remedy covering the same ground as the statutory right available to him under the Employment Rights Act 1996 through the Employment Tribunal system.
Held: The statutory system for compensation for unfair . .
Cited – Shiloh Spinners Ltd v Harding HL 13-Dec-1972
A right of re-entry had been reserved in the lease on the assignment (and not on the initial grant) of a term of years in order to reinforce covenants (to support, fence and repair) which were taken for the benefit of other retained land of the . .
Cited – MacNiven (Inspector of Taxes) v Westmoreland Investments Ltd HL 15-Feb-2001
The fact that a payment of interest was made only to create a tax advantage did not prevent its being properly claimed. Interest was paid for the purposes of setting it against tax, when the debt was discharged. A company with substantial losses had . .

Cited by:
Cited – Child Poverty Action Group, Regina (on the Application of) v Secretary Of State for Work and Pensions CA 14-Oct-2009
CPAG appealed against a refusal of a declaration that the respondent could use only the 1992 Act to recover overpayment of benefits where there had been neither misrepresentation nor non-disclosure.
Held: The appeal succeeded, and the court . .
Cited – Digicel (St Lucia) Ltd and Others v Cable and Wireless Plc and Others ChD 15-Apr-2010
The claimants alleged breaches of legislation by members of the group of companies named as defendants giving rise to claims in conspiracy to injure by unlawful means. In effect they had been denied the opportunity to make interconnections with . .
Cited – Mobilx Ltd and Others v HM Revenue and Customs; Blue Sphere Global Ltd v Same and similar CA 12-May-2010
Each company sought repayment of input VAT. HMRC refused, saying that the transactions were the end-product of a fraud on it, and that even if the taxpayer did not know that a fraud was involved, it should have been aware that one was and acted . .
Cited – The Child Poverty Action Group v Secretary of State for Work and Pensions SC 8-Dec-2010
The Action Group had obtained a declaration that, where an overpayment of benefits had arisen due to a miscalculation by the officers of the Department, any process of recovering the overpayment must be by the Act, and that the Department could not . .
Applied – The Racing Partnership Ltd and Others v Done Brothers (Cash Betting) Ltd and Others ChD 8-May-2019
Actions concerning the alleged infringement of the claimants’ rights in respect of data relating to horseracing. The claimant had provided horse race betting odds (Betting shows) to race course owners. A rival company had provided similar data to . .
Cited – The Racing Partnership Ltd and Others v Sports Information Services Ltd CA 9-Oct-2020
The court looked at the limitations: (1) the legal protection of sports data and other information which is not subject to traditional intellectual property rights; (2) the scope of an action under the equitable doctrine of breach of confidence or . .
Cited – JSC BTA Bank v Khrapunov SC 21-Mar-2018
A had been chairman of the claimant bank. After removal, A fled to the UK, obtaining asylum. The bank then claimed embezzlement, and was sentenced for contempt after failing to disclose assets when ordered, but fled the UK. The Appellant, K, was A’s . .

Lists of cited by and citing cases may be incomplete.

VAT, Torts – Other, Customs and Excise, Constitutional

Leading Case

Updated: 09 November 2021; Ref: scu.266167

JMB Wilmington v Revenue and Customs: FTTTx 30 Apr 2012

VAT – appeal against HMRC’s refusal to apply the Flat Rate Scheme retrospectively -the appellant claimed that there were exceptional circumstances for the late application- appeal dismissed- the purpose of the scheme was to simplify the accounting for VAT by small businesses but three VAT returns had already been submitted by the appellant before the application for admission to the scheme was received

[2012] UKFTT 287 (TC)
Bailii
England and Wales

VAT

Updated: 09 November 2021; Ref: scu.462687

Mahageben v Nemzeti: ECJ 21 Jun 2012

MahagebenECJ2012

ECJ Taxation – VAT – Sixth Directive – Directive 2006/112/EC – Right to deduct – Conditions governing the exercise of that right – Article 273 – National measures to combat fraud – Practice of the national tax authorities – Refusal of the right to deduct in the event of improper conduct on the part of the issuer of the invoice relating to the goods or services in respect of which the exercise of that right is sought – Burden of proof – Obligation of the taxable person to satisfy himself as to the propriety of the conduct of the issuer of that invoice and to provide proof thereof

Lenaerts P
C-80/11, [2012] EUECJ C-80/11, [2011] EUECJ C-80/11
Bailii, Bailii
Directive 2006/112/EC

European, VAT

Updated: 02 November 2021; Ref: scu.460894

Revenue and Customs v Secret Hotels2 Ltd: SC 5 Mar 2014

The Court was asked as to: ‘the liability for Value Added Tax of a company which markets and arranges holiday accommodation through an on-line website. The outcome turns on the appropriate characterisation of the relationship between the company, the operators of the hotels, and the holiday-makers or their travel agents (which is an English law issue), and the impact of certain provisions of the relevant EU Directive on that relationship once it has been characterised (which is an EU law issue).
Held: The appeal of the taxpayer was successful. The correct legal analysis of the tripartite relationship between Med, hoteliers and customers was that Med marketed and sold hotel accommodation to customers as the agent of the hoteliers and was in these circumstances acting solely as an intermediary for VAT purposes.
Article 306 created two categories of travel agent, namely (a) those ‘who deal with customers in their own name and use supplies of goods or services provided by other taxable persons, in the provision of travel facilities’ and (b) those who ‘act solely as intermediaries’ (referred to for convenience as, respectively, ‘ article 306.1(a) ‘ and ‘ article 306.1(b)’), and provides for a special VAT scheme for transactions carried out by travel agents who fall within article 306.1(a). Med had been acting as an intermediary and not in its own name, and therefore fell within the provisions of article 306.1(b).
When assessing the VAT consequences of a particular contractual arrangement, the court should, at least normally, characterise the relationships by reference to the contracts and then consider whether that characterisation is vitiated by any relevant facts.
Lord Neuberger PSC said: ‘When interpreting an agreement, the court must have regard to the words used, to the provisions of the agreement as a whole, to the surrounding circumstances insofar as they are known to both parties, and to commercial common sense.’

Lord Neuberger, President, Lord Sumption, Lord Reed, Lord Hughes, Lord Hodge
[2014] UKSC 16, [2014] BVC 9, [2014] 2 All ER 685, [2014] STI 864, [2014] STC 937, UKSC 2013/0036
Bailii, Bailii Summary, SC, SC Summary
Directive 2006/112/EC 2.1(c)
England and Wales
Citing:
At CA – Secret Hotels2 Ltd v Revenue and Customs CA 3-Dec-2012
The Revenue appealed from a finding at the UTTC that the taxpayer company had acted not as a principal but rather as an agent.
Held: Morgan J was wrong to criticise the FTT for looking at ‘the whole facts of the case’ as opposed to . .
At FTTTx – Secret Hotels2 Ltd (Formerly Med Hotels Ltd) v Revenue and Customs FTTTx 15-Mar-2010
FTTTx Value Added Tax – Whether supplies of hotel and other holiday accommodation made by Appellant as agent for accommodation suppliers or as principal.
Value Added Tax – If Appellant is principal whether . .
At UTTC – Secrets Hotels2 Limited UTTC 29-Jul-2011
Value Added Tax – written agreements to provide hotel accommodation to holidaymakers – identity of supplier – was it hotel operator or company operating a bookings website – principles as to construction of written agreements – no difference because . .
Cited – F L Schuler AG v Wickman Machine Tools Sales Limited HL 4-Apr-1973
The parties entered an agreement to distribute and sell goods in the UK. They disagreed as to the meaning of a term governing the termination of the distributorship.
Held: The court can not take into account the post-contractual conduct or . .
Cited – Van Ginkel Waddinxveen v Inspecteur der Omzetbelasting ECJ 12-Nov-1992
(Judgment) Article 26 of Directive 77/388: Sixth Directive, which concerns the special scheme applicable to travel agents in the matter of imposition of value added tax, must be interpreted as meaning that the fact that the transport of the . .
Cited – Commissioners of Customs and Excise v Madgett and Baldwin (trading as Howden Court Hotel) ECJ 22-Oct-1998
The court considered the criteria for determining whether the provision to guests by a hotelier of travel services (and in particular transport to and from the hotel and excursions) constituted supply which was ancillary to the supply of . .
Cited – Mercantile International Group Plc v Chuan Soon Huat Industrial Group Ltd CA 8-Mar-2002
The court was asked whether the claimants were a commercial agent of the defendants under the 1993 regulations.
Held: It is common for agents acting in the sale of financial products, eg many types of insurance policies, to fix its own . .
Cited – Halifax plc etc v Commissioners of Customs and Excise ECJ 21-Feb-2006
ECJ Sixth VAT Directive – Article 2(1), Article 4(1) and (2), Article 5(1) and Article 6(1) – Economic activity – Supplies of goods – Supplies of services – Abusive practice – Transactions designed solely to . .
Cited – A1 Lofts Ltd v Revenue and Customs ChD 30-Oct-2009
Lewison J said: ‘The court is often called upon to decide whether a written contract falls within a particular legal description. In so doing the court will identify the rights and obligations of the parties as a matter of construction of the . .
Cited – Commissioners for Her Majesty’s Revenue and Customs v RBS Deutschland Holdings ECJ 22-Dec-2010
ECJ Sixth VAT Directive – Right to deduction – Purchase of vehicles and use for leasing transactions – Differences between the tax regimes of two Member States – Prohibition of abusive practices
‘taxable . .
Cited – Henfling, Davin, Tanghe ECJ 14-Jul-2011
ECJ Taxation – Sixth VAT Directive – Article 6(4) – Exemption – Article 13(B)(f) – Gambling – Services provided by a commission agent ‘buraliste’ acting in his own name but on behalf of a principal operating a . .
Cited – Revenue and Customs v Aimia Coalition Loyalty UK Ltd SC 13-Mar-2013
The company managed a card loyalty scheme for retailers. The Revenue appealed against a decision that the company could reclaim VAT input tax on the goods purchased on the customers redeeming their points. The ECJ had decided that the service . .
Cited – Revenue And Customs v Newey ECJ 20-Jun-2013
ECJ Reference for a preliminary ruling – Sixth VAT Directive – Article 2(1) and Article 6(1) – Meaning of ‘supply of services’ – Supply of advertising and loan broking services – Exemptions – Economic and . .
At FTTTx – Secret Hotels2 Ltd (Formerly Med Hotels Ltd) v Revenue and Customs FTTTx 15-Mar-2010
FTTTx Value Added Tax – Whether supplies of hotel and other holiday accommodation made by Appellant as agent for accommodation suppliers or as principal.
Value Added Tax – If Appellant is principal whether . .

Cited by:
Cited – Airtours Holidays Transport Ltd v Revenue and Customs SC 11-May-2016
The court was asked whether the appellant, Airtours Holidays Transport Ltd (formerly MyTravel Group plc), was entitled to recover, by way of input tax VAT charged by PricewaterhouseCoopers LLP in respect of services provided by PwC and paid for by . .
Cited – Uber Bv and Others v Aslam and Others CA 19-Dec-2018
Uber drivers are workers
The claimant Uber drivers sought the status of workers, allowing them to claim the associated statutory employment benefits. The company now appealed from a finding that they were workers.
Held: The appeal failed (Underhill LJ dissenting) The . .
Cited – Uber Bv v Aslam and Others (Jurisdictional Points – Worker, Employee or Neither : Working Time Regulations) EAT 10-Nov-2017
Uber drivers are workers
JURISDICTIONAL POINTS – Worker, employee or neither
WORKING TIME REGULATIONS – Worker
‘Worker status’ – section 230(3)(b) Employment Rights Act 1996 (‘ERA’), regulation 36(1) Working Time Regulations 1998 (‘WTR’) and section 54(3) . .
Cited – Lehman Brothers International (Europe) v Exotix Partners Llp ChD 9-Sep-2019
The parties had contracted to trade global depository notes issued by the Peruvian government. Each made mistakes as to their true value, thinking them scraps worth a few thousand dollars, whereas their true value was over $8m. On the defendant . .
Cited – Uber Bv and Others v Aslam and Others SC 19-Feb-2021
Smartphone App Contractors were as Workers
The court was asked whether the employment tribunal was entitled to find that drivers whose work was arranged through Uber’s smartphone application work for Uber under workers’ contracts and so qualify for the national minimum wage, paid annual . .

Lists of cited by and citing cases may be incomplete.

VAT, European, Contract

Leading Case

Updated: 02 November 2021; Ref: scu.521994

Turbine Motor Works Ltd v Revenue and Customs: FTTTx 3 Nov 2011

FTTTx Appeal against assessment made by HMRC applying the Capital Goods Scheme in respect of and excess of VAT input tax recovered – appeal allowed – Appellant made some exempt supplies and should have applied the standard method override but is now out of time to do so

Radford J
[2011] UKFTT 706 (TC)
Bailii
England and Wales

VAT

Updated: 02 November 2021; Ref: scu.449682

Direktor Na Direktsia v Orfey Balgaria Eood: ECJ 19 Dec 2012

dndirektsia_obeECJ2012

ECJ VAT – Directive 2006/112/EC – Articles 63, 65, 73 and 80 – Establishment by natural persons of a building right in favour of a company in exchange for construction services by that company for those persons – Barter contract – VAT on construction services – Chargeable event – When chargeable – Payment on account of the entire consideration – Payment on account – Basis of assessment for a transaction in the event of consideration in the form of goods or services – Direct effect

C Toader, acting P
C-549/11, [2012] EUECJ C-549/11
Bailii
Directive 2006/112/EC

European, VAT, Construction

Leading Case

Updated: 02 November 2021; Ref: scu.468764

Argos Distributors v Commissioners of Customs and Excise: ECJ 24 Oct 1996

VAT was payable on the value of a discount voucher only, and not on the full price of the goods. ‘According to the court’s settled case law, the taxable amount for the supply of goods or services is represented by the consideration actually received for them.’ VAT had been charged on vouchers on a basis inconsistent with Community law. The reference raised no question about whether the same could be said about teacakes: ‘There is only one difference between the early vouchers claim and the [late vouchers and teacakes] claims; as regards the early vouchers claim, the national legislation itself contravened the Directive, whereas with respect to the other two claims that legislation was unimpeachable in itself but was misapplied. Yet the end result in the two instances was precisely the same: the Directive was breached . . ‘ and ‘It is manifestly clear from the documents before the court that, in regard to both teacakes and gift vouchers after August 1992, the commissioners applied national tax legislation in a manner inconsistent with the directive.’

Advocate General Geelhoed
Times 18-Nov-1996, C-288/94, [1996] STC 1359, [1996] ECR I-5311, [1996] EUECJ C-288/94, [1997] QB 499
Bailii
Cited by:
Cited – Nell Gwynn House Maintenance Fund v Commissioners of Customs and Excise HL 15-Dec-1998
Trustees who managed a group of apartments argued that they did not themselves provide staff services to the tenants, but rather arranged for the staff to provide services to them.
Held: The contract providing cleaning and other services, by a . .
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 – Marks and Spencer Plc v Customs and Excise HL 28-Jul-2005
The claimant had sought repayment of overpaid VAT, and the respondent resisted arguing that this would be an unjust enrichment. A reference to the European Court was sought.
Held: It was not possible to say that the House’s opinion was acte . .
Cited – Marks and Spencer Plc v Customs and Excise HL 4-Feb-2009
The taxpayer requested refund of VAT overpaid on chocolate covered cakes. The CandE resisted saying that the money had been substantially already paid by its customers. The case had been referred twice to the ECJ, who answered that the maintenance . .

Lists of cited by and citing cases may be incomplete.

European, VAT

Leading Case

Updated: 02 November 2021; Ref: scu.161452

Faaborg-Gelting Linien v Finanzamt Flensburg: ECJ 2 May 1996

A non-takeaway restaurant is a supply of services, and a ferry supply was made from its place of business. The supply of prepared food and drink at a restaurant resulted from a whole series of services (including the preparation and service of the meal); and that since restaurant transactions were characterised by a cluster of features and acts of which the provision of food was only one component and in which services largely predominate, they were to be characterised as supplies of services. This must be so though the quality of the food and the cost (eg of champagne at the meal) is very high indeed. The court distinguished the situation where the transaction relates to ‘take-away’ food: such a transaction is a supply of goods. Where the transaction consists of a composite supply of services and goods (or of different categories of services) which from an economic point of view cannot be severed, the principal supply must be identified and the character of the principal supply determines the character of the component parts of the transaction: ‘In order to determine whether such transactions constitute supplies of goods or supplies of services, regard must be had to all the circumstances in which the transaction in question takes place in order to identify its characteristic features.’ and ‘Consequently, restaurant transactions are characterised by a cluster of features and acts, of which the provision of food is only one component and in which services largely predominate. They must therefore be regarded as supplies of services within the meaning of art 6(1) of the Sixth Directive. The situation is different, however, where the transaction relates to ‘takeaway’ food and is not coupled with services designed to enhance consumption on the spot in an appropriate setting.’

Times 09-May-1996, C-231/94, [1996] STC 774, [1996] ECR I-2395, [1996] EUECJ C-231/94, [1996] All ER (EC) 656, [1996] CEC 587, [1996] 3 CMLR 535
Bailii
Council Directive 77/388/EEC May 17 1977
Cited by:
Cited – College of Estate Management v Commissioners of Customs and Excise ChD 13-Nov-2003
The college appealed a finding that the supply of course manuals to its students was part of its exempt rather than zero-rated supply.
Held: ‘Once it is decided that there is a single supply from an economic view which should not be . .
Cited – College of Estate Management v Commissioners of Customs and Excise CA 11-Aug-2004
When offering courses to distance learning students, the College offered materials for the courses. As part of the course this supply would be exempt, as books, the supply would be zero-rated, but the taxpayer would be able to reclaim its VAT . .
Cited – Card Protection Plan Ltd v Commissioners of Customs and Excise ECJ 25-Feb-1999
A company procuring insurance purchases for credit card protection was as exempt from VAT as was the insurer. A provision which restricted the ability to claim such exemption to those registered as insurers under national was invalid under European . .
Cited – Beynon and Partners v Customs and Excise HL 25-Nov-2004
The House asked whether the personal administration of a drug such as a vaccine by an NHS doctor to a patient is a taxable supply for the purposes of value added tax. The provision of medical care in the exercise of the medical and paramedical . .
Cited – College of Estate Management v Customs and Excise HL 20-Oct-2005
The college supplied educational services by distance learning. The commissioner sought to argue that printe daterials supplied with the course were ancillary and did not have the same exemption form VAT.
Held: The supplies did benefit from . .
Cited – HM Revenue and Customs v Weight Watchers (UK) Ltd ChD 21-Jan-2008
The court was asked whether the weight-watchers program which included attendance at a course and a supply of supporting materials was one single standard-rated supply or separate supplies of zero-rated printed materials and standard-rated support . .
Cited – Office of Fair Trading v Abbey National Plc and seven Others ComC 24-Apr-2008
The Office sought a declaration that the respondent and other banks were subject to the provisions of the Regulations in their imposition of bank charges to customer accounts, and in particular as to the imposition of penalties or charges for the . .

Lists of cited by and citing cases may be incomplete.

VAT, European

Leading Case

Updated: 02 November 2021; Ref: scu.161411

Powa (Jersey) Ltd v HMRC: UTTC 8 Feb 2012

UTTC VALUE ADDED TAX – input tax – MTIC and contra-trading – whether connection to fraudulent trading as condition of denial of right to deduct input tax requires privity of contract with fraudulent trader – test in Kittel and Recolta Recycling – whether English mistranslation of French text of the judgment – whether to refer question to ECJ – application of Court of Appeal judgment in Mobilx

Roth J
[2012] UKUT 50 (TCC)
Bailii
England and Wales

VAT

Updated: 02 November 2021; Ref: scu.452892

WHA Ltd and Another v Revenue and Customs: SC 1 May 2013

The Court was asked as to the effectiveness of a scheme, known as Project C, designed to minimise the overall liability to VAT of a group of companies involved in motor breakdown insurance.
Held: The court dismissed WHA’s appeal. There had been no supply of repairs to WHA. The justifications for the project relied upon there being such a supply, and the scheme therefore failed. The Court of Appeal had been wrong to disagree with the decision of the VAT and Duties Tribunal as to the construction and effect of the arrangements involved. Accordingly it said nothing about the principle of abuse of right. It follows that the observations of the Court of Appeal on abuse of right were not binding as a matter of ratio, but they remain persuasive.
Lord Reed said that ‘ . . The contractual position is not conclusive of the taxable supplies being made as between the various participants in these arrangements, but it is the most useful starting point’

Lord Hope, Deputy President, Lord Walker, Lord Mance, Lord Reed, Lord Carnwath
[2013] UKSC 24, UKSC 2009/0074, [2013] STC 943, [2013] BVC 155, [2013] STI 1769, [2013] 2 All ER 907
Bailii, Bailii Summary, SC Summary, SC
Council Directive 67/227/EEC, Council Directive 77/388/EEC, Value Added Tax Act 1994
England and Wales
Citing:
At ChD – WHA Ltd and Another v Customs and Excise ChD 28-Feb-2003
The taxpayer appealed against a finding that it was unable to recover input VAT in its transactions. A scheme had been devised for the processing of claims and repairs in motor vehicle accidents.
Held: (1) WHA could treat the VAT payable on . .
At CA – WHA Ltd and Another v Customs and Excise CA 14-May-2004
. .
Appeal from – WHA Ltd and Another v Revenue and Customs CA 17-Jul-2007
The court considered the European principle of abuse of right.
Held: Lord Neuberger, delivering the leading judgment rejected the submission that the court was confined to considering the artificiality or purpose of each individual step, since . .
Cited – Commissioners of Customs and Excise v Redrow Group Plc HL 11-Feb-1999
Where house builders had paid the estate agents’ fees for exchanged property on sales, the supply had been, at least in part, to the builder, and the builder could accordingly recover the agents’ VAT as input tax. A supplier could be treated as . .
Cited – Revenue and Customs v Aimia Coalition Loyalty UK Ltd SC 20-Jun-2013
Decisions about the application of the VAT system are highly dependent upon the factual situations involved. The case-law of the Court of Justice indicates that, when determining the relevant supply in which a taxable person engages, regard must be . .

Cited by:
Cited – Pendragon Plc and Others v HM Revenue and Customs CA 23-Jul-2013
The Revenue had imposed a penalty on the appellants saying that their arrangement for the sale and VAT taxation of demonstrator cars was, in European law terms. The taxpayer sought re-instatment of the First Tier Tribunal judgment in its favour.
Cited – Airtours Holidays Transport Ltd v Revenue and Customs SC 11-May-2016
The court was asked whether the appellant, Airtours Holidays Transport Ltd (formerly MyTravel Group plc), was entitled to recover, by way of input tax VAT charged by PricewaterhouseCoopers LLP in respect of services provided by PwC and paid for by . .

Lists of cited by and citing cases may be incomplete.

VAT, European

Updated: 02 November 2021; Ref: scu.503503

Thimbleby Farms Ltd v Revenue and Customs: FTTTx 8 Jul 2010

FTTTx VAT – CONSIDERATION – The Appellant supplied game shoots to its director without charge – Tribunal decided that there was a direct link between the game shoots and the services supplied by the director – The supplies of game shoots were effected for consideration – The value of the consideration for each game shoot was 1,000 pounds not 8,000 pounds as asserted by HMRC – Appeal allowed in part.

[2010] UKFTT 320 (TC)
Bailii
England and Wales

VAT

Updated: 02 November 2021; Ref: scu.422339

Greystone International Ltd v Revenue and Customs: FTTTx 13 May 2011

VAT – MTIC fraud – input tax – whether the purchases by the Appellant in the identified deals were ‘connected with fraudulent evasion of VAT’ as per Axel Kittel at para. [61] – held they were – whether the Appellant was a taxable person who knew or should have known that by its purchase it was participating in a transaction ‘connected with fraudulent evasion of VAT’ – held it was a taxable person who both knew and should have known this – appeal dismissed

[2011] UKFTT 321 (TC)
Bailii
England and Wales

VAT

Updated: 02 November 2021; Ref: scu.443041

Sherratt and Another v Revenue and Customs: FTTTx 9 Jun 2011

DIY BUILDERS – refund of Vat – prohibition on separate disposal in planning permission – construction single farmhouse adjacent to farm buildings -whether ‘separate use or disposal’ prohibited- yes- appeal dismissed VAT Act 1994 s 35 and schedule 8

[2011] UKFTT 381 (TC)
Bailii
England and Wales

VAT

Updated: 02 November 2021; Ref: scu.443143