International Cases Update – January/February 2014

In January and February 2014 the following decisions dealing with VAT in the UK were handed down. My research has not uncovered any decisions in New Zealand or Canada.

Of particular interest is that on Friday the UK Supreme Court handed down its decision in Revenue & Customs v Secret Hotesl2 Ltd [2014] UKSC 16 where it allowed the appeal by the taxpayer. The appeal concerned the liability for VAT of a company which markets and arranges holiday accommodation though an on-line website and the essential question was whether the appellant was acting as a principal, or as an agent, when making the supplies of hotel accommodation. The Supreme Court found that the contractual documents and the website made it clear that the hotel room was provided through the agency of the appellant, and that the manner in which the appellant carried on its business did not support a contrary conclusion. It is a case that appears to have some similarity to ATS Pacific Pty Ltd v Commissioner of Taxation [2013] FCA 341 (which is currently on appeal to the Full Federal Court).

My analysis of the decision of the UK Supreme Court can be accessed here

Upper Tax Tribunal

  • HMRC v Brockenhurst College [2014] UKUT 46 – VAT – whether supplies of catering and entertainment services to members of the public are exempt as supplies closely related to the provision of education – Sixth VAT Directive, Article 13A(1)(m); Principal VAT Directive, Article 132(1)(i) – VATA 1994, Sch 9, Group 6, Item 4 – appeal dismissed

First Tier Tax Tribunal

  • Associated Newspapers Ltd v Revenue & Customs [2014] UKFTT 116 – VAT – retailer vouchers – delivery to customers as part of newspaper sales promotional scheme – whether articles 3 and 5 of the Value Added Tax (Supply of Services) Order 1993 apply to impose an output tax liability by reference to the cost of the vouchers – whether the vouchers were used for a purpose other than a purpose of the business of the Appellant – held no – preliminary issue decided in favour of the Appellant
  • British Printing Industries Federation v Revenue & Customs [2014] UKFTT 150 – VAT- exempt services – Value Added Tax Act 1994, Schedule 9, Group 9, item 1(d), note (5) and Article 132(1)(l) of the Principal VAT Directive (2006/112/EC) – employers federation providing services to members in return for annual subscriptions – whether membership subscriptions exempt from VAT – whether ‘trade union’ association – whether primary purpose of federation included making representations to third party decision makers – whether objectives of association were for the collective interests of members
  • Concept Multi Car Ltd v Revenue & Customs [2014] UKFTT 110 – VAT – Zero rating- whether camper vans converted from VW T5 motor vans supplied to disabled customers by appellant were adapted “permanently and substantially” to enable a disabled person who usually used a wheel chair  “to enter and drive or otherwise be carried in” the vehicle for the purposes of Note 5L to Item 2A Schedule 8 Group 12 VATA 1994 – combination of adaptations consisting of ambulance ramp fitting strip and swivel seats fulfilled criteria – appeal allowed
  • The English Bridge Union Ltd v Revenue & Customs [2014] UKFTT 181 – VAT – sport – whether contract bridge a sport within Art 132(1)(m) of Principal VAT Directive
  • Envoygate (Installations) Ltd & Richvale Ltd v Revenue & Customs [2014] UKFTT 221 – VALUE ADDED TAX – supply of replacement box sash windows and supply of draught stripping for windows – installation of energy-saving materials – supplies at reduced rate of VAT – whether single supply or separate supplies so that supply of draught stripping for windows is a supply at reduced rate – if single supply, whether nevertheless the reduced rate of VAT should be applied to draught stripping work as a concrete and specific aspect of the single supply – on the facts the supply of draught stripping for windows is a separate supply taxable at the reduced rate of VAT – appeal allowed – s 29A and Group 2, Sch. 7A VATA 1994
  • European Tour Operators Association v Revenue & Customs [2014] UKFTT 213 – VAT – Exempt services – Item 1(d) of Group 9 of Schedule 9 VATA 1994 – Whether membership subscriptions of a trade association constitute exempt supplies – Matter remitted by Upper Tribunal for reconsideration – Appeal allowed
  • Finmeccanica Group Services Spa v Revenue & Customs [2014] UKFTT 224 – VAT – Place of Supply – organisation of enclosure at Farnborough air show – whether advertising services or exhibition.
  • GSTS Pathology Services LLP v Revenue & Customs [2014] UKFTT 211 – Value Added Tax – exemption – medical care – analysis of medical samples – service supplied to medical institution or practitioner, not to patient – whether exempt
  • Kumon Educational UK Co Ltd & Kumon Book Services (UK) Ltd v Revenue & Customs [2014] UKFTT 109 – VAT – OUTPUT TAX –provider of standard rated tuition programme set up subsidiary to provide worksheets as zero rated supplies – whether subsidiary made zero rated supplies of worksheets – yes – whether supplies of worksheets part of single standard rated supply of services – no – whether contractual arrangements sham – no – whether contractual arrangements abusive practice – no – appeals allowed
  • SAE Education Ltd v Revenue & Customs [2014] UKFTT 218 – VAT – Exemption – Company providing educational courses to students – succession of agreements between company and university – whether supply of educational courses by company exempt – whether courses supplied by eligible body – whether company a college of a university – VATA 1994 Sch 9, Group 6, Item 1, Note (1)(b) – EC Council Directive 2006/112, Art 132(1)(i) – appeal allowed
  • SIMON JAMESON NAGLE & JULIE KEMSLEY t/a SIMON TEMPLAR BUSINESS CENTER v Revenue & Customs [2014] UKFTT 131– VAT – Input tax – Whether valid claim for recovery of input tax in respect of retail vouchers (as defined by paragraph 4(1) schedule 10A Value Added Tax Act 1994) – Whether the supply of retail vouchers is a standard or zero-rated supply – jurisdiction of Tribunal in case of  legitimate expectation
  • Way Ahead Group Ltd v Revenue & Customs [2014] UKFTT 178 – Value added TAX – Treatment of supplies by primary ticket agent – Whether “Booking Fee” exempt? – On facts – Yes – Appeal allowed
  • Working Museum and Arts and Crafts Centre v Revenue & Customs [2014] UKFTT 176 – VAT –was appellant charity making a taxable supply to local authority under services agreement – yes – appeal allowed.
  • Wilton Park Ltd & Others v Revenue & Customs [2014] UKFTT 115 – VAT – whether face-value vouchers issued by appellant companies and paid for by patrons using debit and credit cards for use in payment for dancers’ services in appellant companies’ lap dancing clubs and subsequently redeemed by dancers dealings in credit guarantees or any other security and on redemption exempt from VAT– item 1 Group 5 Schedule 9 to VATA 1994 – yes – whether dealings in vouchers separate dealings in security for money – no – redemption of vouchers held to be ancillary part of overall composite taxable supply of performance facilitation services by appellants –  appeals dismissed

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