International Cases Update – November/December 2013

In November and December 2013 the following VAT/GST decisions were handed down in the UK, New Zealand and Canada.

Of particular interest was the decision of the First Tier Tribunal in AV Concepts Ltd v Revenue & Customs [2013] UKFTT 646. The taxpayer sold electronic “white boards” to schools for cash, plus the supply by the school to the taxpayer of various obsolete projectors and similar equipment. The issue was whether the sale was a part-exchange or barter transaction in which the consideration consisted of the receipt of cash plus the value of the part-exchange item – or whether the obsolete item should be treated as a discount, with the consideration being confined to just the cash. My analysis of the decision can be accessed here.

United Kingdom

Upper Tax Tribunal

  • Finance & Business Training Ltd v Revenue & Customs [2013] UKUT 594 – Value Added Tax – whether services provided by Appellant exempt under Value Added Tax Act 1994, Schedule 9, Group 6, Item 1 – whether Appellant was “an eligible body” within Note (1)(b)- whether Appellant was a college or institution of the University of Wales – whether possible to be an eligible body in relation to some of the Appellant’s activities and not an eligible body in relation to the remainder of its activities
  • Leeds City Council v HMRC [2013] UKUT 596 – VALUE ADDED TAX – claim for repayment of VAT – failure of UK to implement Article 4.5 of Sixth VAT Directive – erroneous guidance issued by HMRC – curtailment of limitation period for claims – section 80 VAT Act 1994 – whether compatible with EU legal principles – appeal dismissed

First Tier Tribunal

  • AV Concepts Ltd v Revenue & Customs [2013] UKFTT 646 – Value Added Tax  –  Whether goods were sold for a combination of cash and the value of part-exchange items, or whether the part-exchange items were in substance the equivalent of a discount so that the goods should be treated as sold for the cash consideration alone  –  Appeal dismissed
  • Cabvision Ltd v Revenue & Customs [2013] UKFTT 721 – VAT – Consideration – Other –arrangements similar to those used in Tower MCashback – appellant sold software to LLP investment vehicle – purchase funded  by member subscriptions and debt incurred to bank 1 – debt guaranteed by bank 2 – guarantee secured by deposit made by appellant – appellant paid VAT on £22,602,979 received from LLP – whether correct VAT was lesser amount because some of that amount was security for bank loan to LLP and received subject to restrictions – yes – loan transaction which funded purchase and restrictions on the amount received elements of the same transaction – VAT due on amount actually received by appellant which was lesser amount taking account of the banking arrangements –  alternatively as argued by the appellant VAT was lesser amount because later settlement of dispute reduced price  through a collateral oral agreement between the appellant and the LLP – appeal allowed
  • DPAS Ltd v Revenue & Customs [2013] UKFTT 676 – VAT – Whether dental payment plan administrator provided services to patient for consideration –  Whether these services were exempt or standard rated supplies – If exempt whether change in contractual arrangements from 1 January 2012 amounted to a “Halifax” abusive practice – Appeal allowed
  • Intelligent Managed Services Ltd v Revenue & Customs [2013] UKFTT 741 – VAT – Whether transfer of a business can be a transfer as a going concern and/or total transfer of business assets if transferee is a member of a VAT group which makes supplies only to another member of the same VAT group – Appeal dismissed
  • John Martin Holdings Ltd v Revenue & Customs [2013] UKFTT 714 – VALUE ADDED TAX – Zero rating of the supply of a qualifying motor vehicle for handicapped person who usually uses a wheelchair – Items 2(A) and 2(f) and Note 5L Group 12 Schedule 8 VATA 1994 considered.  Whether supply made to handicapped person/disabled wheelchair user for domestic or personal use – whether sufficient evidence available to supplier to allow zero rating of supply – Appeal dismissed.
  • Leyton Sixth Form College v Revenue & Customs [2013] UKFTT 660 – VALUE ADDED TAX – construction of buildings – whether zero-rated or standard-rated supplies – whether construction of a building by a college was an enlargement of, or an extension to, an existing building, or the construction of an annexe to an existing building – whether, if an annexe, it was capable of functioning independently from the existing building, and whether there is one main access to annexe and existing building – construction was an extension to an existing building and therefore supplies standard-rated – appeal dismissed – VATA 1994, Schedule 8, Group 5, Item 2 and Notes 16 and 17
  • Magic Memories Ltd v Revenue & Customs [2013] UKFTT 730 – VALUE ADDED TAX– supply of photo-books at the visitor attractions – whether supply of goods or services – if supply of goods, whether a supply of photographs or of photo-books – whether photo-books were “books or booklets” within Item 1 of Group 3 of Schedule 8 Value Added Tax Act 1994- appeal allowed

New Zealand

Canada

Tax Court

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