MBNA Europe Bank Ltd v Revenue and Customs: VDT 18 Jan 2006

VAT – input tax – credit card bank – partially exempt trader – agreed special method and regulation 103 agreement for attribution of residual input tax – securitisation of credit card receivables – assignment of receivables to Jersey receivables trustee – trustee holding assigned receivables on trust for Jersey company which issued loan notes on security of receivables – whether assignment capable of amounting to supply by bank or merely security for loan – whether withdrawal of agreed special method and regulation 103 agreement valid – assuming assignment was supply for VAT purposes whether they and servicing of them made at fixed establishment of receivables trustee in UK – whether assessments to tax should be reduced – whether servicing of customers’ accounts uses residual inputs – assuming it does, whether full servicer fee should be included in calculation or a lesser proportion – whether share of servicer fees attributable to non-designated accounts should be excluded from contractual amount – how should servicer agreement be construed as to its scope, and administering and collecting of receivables – whether when used as proxy servicer fees also suffer from further flaw of being unreliable – whether agreed method and agreement should be construed as excluding receivables on accounts not designated at time returns made but designated before paid – whether voluntary disclosure in part out of time as having been made more than 3 years after end of relevant accounting periods – Sixth VAT Directive, arts 9, 11, 13, 17 and 19 – VATA 1994 ss. 4, 9, 24, 26, Sch 9 Gp 5 VAT Regs 1995, regs 29, 35, 101, 102 and 103 – VAT (Input Tax) (Specified Supplies) Order 1999, arts 2 and 3.
[2006] UKVAT V19413
England and Wales

Updated: 09 February 2021; Ref: scu.238965