International cases update – December 2012/January 2013

In December 2012 and January 2013 the judgments listed below were handed down in the UK dealing with VAT. Of interest is the decision of the Privy Council in Director General, Mauritius Revenue Authority v Central Water Authority (Mauritius) [2013] UKPC 4 where the perennial issue of characterising a transaction as a single supply or multiple supplies was raised, this time in the context of the Mauritius VAT legislation which was largely based on the UK legislation.

The issue was whether the Central Water Authority was entitled to input tax credits for acquisition of water meters to fit in customers’ properties. This depended on whether CWA made a single taxable supply of water (with the supply of the meters being ancillary or incidental supplies) or the supply of water and a separate exempt supply of the supply of water meters. The Courts below found in favour of CWA by adopting the long standing approach to issue established in Card Protection Plan Ltd v Commissioners of Customs and Excise [1999] 2 AC 601. However, the Privy Council allowed the appeal by the Revenue on the basis that it was open to the legislature to identify a “concrete and specific aspect” of what would otherwise be a single supply and to impose a different VAT treatment on that separate aspect. My analysis of the decision can be accessed here.

United Kingdom

Privy Council

First tier Tribunal

  • Cambrian Hydro Power Ltd v Revenue & Customs [2012] UKFTT 764 – VAT – effective date of registration – request to backdate – statutory power – HMRC administrative procedure – genuine error on part of applicant – error unknown to HMRC – whether HMRC acted reasonably – matter sent back for further decision
  • Groundwork Cheshire v Revenue & Customs [2012] UKFTT 750 – VAT –  consideration for supply – Article 73 Principal VAT Directive – subsidies directly linked to the price of the supply – provision  of free environmental consultancy services to businesses – funding from third party – whether payments  amount to consideration – yes –  appeal allowed
  • Hawes & Curtis Ltd v Revenue & Customs [2012] UKFTT 758 – VATA 1994 s24 – input tax – supplies not made to taxpayer – whether input tax reclaimable – whether supplies to agent on behalf of taxpayer – taxpayer ultimate beneficiary – absence of relationship between supplier and beneficiary –  appeal dismissed
  • Market & Opinion Research International Ltd v Revenue & Customs [2013] UKFTT 779 – VAT – INPUT TAX – Fleming claim for unclaimed input tax for period 1 January 1986 to 30 April 1997 on the fuel element of mileage allowances reimbursed to researchers engaged by the appellant – HMRC’s application to amend Statement of Case granted  – Tribunal’s jurisdiction was  appellate rather than supervisory on the  issue of whether appellant had  previously recovered the input tax which was the subject of the claim.
  • McAndrew Utilities Ltd v Revenue & Customs [2012] UKFTT 749 – VALUE ADDED TAX – input tax – section 24 VATA 1994 – regulation 29(2) VAT Regulations 1995 – whether there were taxable supplies by taxable persons – whether the appellant in possession of valid VAT invoices to support its input tax claim – discretion as to alternative evidence of the charge to VAT – appeal substantially dismissed but allowed in part
  • Ltd v Revenue & Customs [2013] UKFTT 50 – VALUE ADDED TAX — discounted price sales — customers paying monthly fee for right to buy at discounted price — whether fee taxable if no goods bought — yes — appeal dismissed
  • Noble v Revenue & Customs [2012] UKFTT 760 -Value Added Tax – Whether supplies made – Input tax recovery – evidence required to discharge burden – insufficient evidence – appeal dismissed
  • South African Tourist Board v Revenue & Customs [2013] UKFTT 780 – VAT – statutory body funded by government under performance agreement – whether supply for consideration – whether economic activity – no

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