VDT CONSIDERATION – Value of supply – Retailer – Payment by credit or debit card – Appellant invites sales of goods and services at shelf price to customer – In-store notices and till slips state that customers may pay by card if 2.5% of price paid is payable to Appellant’s subsidiary for card-handling services – Customer’s card debt acquired by third party banks – Whether separate supply of exempt card-handling services by subsidiary to customer – Whether customer agrees with subsidiary for supply of services to customer – No – Whether value of Appellant’s standard rated supply of goods or services reduced by 2.5% – No – Appeal dismissed
SUPPLY – Exemption – Card-processing services – Appellant retailer invites sales of goods or services at shelf price to customers – Customers agree that 2.5% of price paid is payable to Appellant’s subsidiary company for card-handling services – Customer’s card debts to Appellant are acquired by third party banks – Whether, given that customer and subsidiary are in contractual relationship, subsidiary makes supply of card-handling services to customer – No
TAX AVOIDANCE – Reduction of consideration for standard-rated supply – Sales of goods by Appellant – Appellant’s wholly-owned subsidiary’s contracts with card-paying customers provide that 2.5% of price paid will go to subsidiary for card-handling services – Subsidiary appoints Appellant as agent for all card-processing purposes – Customers’ card debts acquired by third party banks – Scheme’s purpose to secure that 2.5% paid to subsidiary is consideration for an exempt supply with result that 97.5% only of shelf price is consideration for Appellant’s standard-rated supply – Whether purported supplies of card-handling services by subsidiary to be disregarded on Halifax principles as being neither economic activities nor supplies for VAT purposes – Yes – Whether conditions for abuse of rights doctrine (Emsland-Starke) satisfied – Yes
[2003] UKVAT V18169
Bailii
England and Wales
Cited by:
Cited – Aitken v Standard Life Assurance Ltd SCS 3-Dec-2008
The pursuer averred that the defendant, his pension provider, had wrongfully reduced its final bonus by ten per cent without notifying him. He sought to imply a term into the contract to provide such an effect, saying that the contract promised an . .
Lists of cited by and citing cases may be incomplete.
Updated: 13 September 2021; Ref: scu.247573