International Cases Update: August – October 2014

In the period August to October 2014 the following decisions relating to VAT and GST were handed down in the United Kingdom and New Zealand.

Of interest is the decision of the New Zealand Taxation Review Authority in Disputant and Commissioner of Inland Revenue [2014] NZTRA 13 where the Authority considered whether the supply of “advisory services” to overseas tour operators in respect of inbound tourism products was taxable or GST-free. This is the third case this year dealing with the GST treatment of supplies of travel arrangements for inbound tourism, with the Full Federal Court here considering the issue in ATS Pacific Pty Ltd v Commissioner of Taxation [2014] FCAFC 33 (my analysis of the decision can be accessed here) (the High Court recently dismissed the taxpayer’s application for special leave – transcript here) and the UK Supreme Court in Revenue & Customs v Secret Hotels2 Ltd [2014] UKSC 16 (my analysis of this decision can be accessed here).

United Kingdom

Upper Tax Tribunal

  • Revenue and Customs v IFX Investment Company Ltd [2014] 398 – VAT – Exemption in Group 4 of Schedule 5 to Finance Act 1972 – Playing games of chance – Whether “Spot the Ball” competition is a “game” – Whether entrants are “playing” a game” Appeal Allowed
  • Taylor Clark Leisure Plc v Revenue and Customs [2014] UKUT 396 – VAT – Fleming claims – Preliminary Issues – Time-bar: construction of VATA 1994, s. 80 – Entitlement: whether right to repayment assigned; whether right capable of assignation; VATA 1994, s. 43.
  • Revenue and Customs v University of Huddersfield [2014] UKUT 438 – VALUE ADDED TAX – University making exempt supplies of education services – refurbishment of leasehold property – lease of property to trust and underlease to University of property by trust – exercise of option to treat lease and underlease as taxable – whether input tax deductible as related to taxable supply of immovable property – purpose of EU and domestic legislation – whether scheme constitutes abuse of right – appeal allowed
  • Westinsure Group Limited v Revenue and Customs [2014] UKUT 452 – VAT – exemption for provision of services of an insurance broker or agent – whether exemption applies to services to facilitate insurance brokers obtaining better terms and related benefits from insurance companies and other insurance related services

First Tier Tribunal

  • Bookit Ltd v Revenue and Customs [2014] UKFTT 856 – VALUE ADDED TAX – financial transactions – exemption – Article 135(1)(d) Principal VAT Directive – card handling services – nature of services – whether transactions concerning payments – scope of exemption – questions to be referred to the CJEU for a preliminary ruling – whether in any event to be excluded from exemption as debt collection – abuse of rights
  • Boxmoor Construction Ltd v Revenue and Customs [2014] UKFTT 833 – VAT –zero- rating for construction of new building – planning permission for extension and alteration – building demolished in substance save for part of facade -whether supply was of construction of new building or alteration of existing building –whether retention of facade was condition of planning permission – HELD –retention of facade not explicit or implicit condition of planning permission – not supply of new building – appeal dismissed.
  • British Credit Trust Ltd v Revenue and Customs [2014] UKFTT 744 – VALUE ADDED TAX – hire-purchase agreements –  whether input tax on repossession costs fully allowable –  subsequent adjustment to appellant’s VAT account – whether a decrease in consideration leading to an adjustment for the purposes of regulation 38 VAT Regulations 1995 – whether an entitlement to bad debt relief under section 36 VATA 1994 – whether valid claim or amendment to claim –  appeal allowed
  • HSM Law Ltd v Revenue and Customs [2014] UKFTT 830 – VAT – creation of company to wind up solicitors practice – transfer of assets of exiting practice to appellant – whether a Transfer of a Going Concern – no – appeal allowed.
  • Ing Intermediate Holdings Ltd v Revenue and Customs [2014] UKFTT 938 – VAT – claim to recover input tax incurred by bank in providing deposit accounts – deposit accounts provided ‘free of charge’ to bank’s customers – whether supply for consideration – yes – whether consideration capable of valuation – yes – appeal dismissed
  • McAllister v Revenue and Customs [2014[ UKFTT 875 – VALUE ADDED TAX – whether operating a trade of buying and selling used cars and car parts – no – whether liable to be registered for VAT – no – whether assessment made to best judgement – no – whether penalty due under VAT Section 67(1) – no – appeal allowed.
  • O’Ryan v Revenue and Customs [2014] UKFTT 838 – VAT  – Registration – whether HMRC were correct to register the Appellant – effect of Appellant being victim of alleged fraud – appeal dismissed
  • Richmond Park Maintenance Ltd v Revenue and Customs [2014] UKFTT 743 – VAT –– Service charges in respect of accommodation units at golf resort –– Some units timeshare units, others subject to 99 year leases –– Whether units are “holiday accommodation” (Group 1 of Schedule 9 VATA) –– In the circumstances of the case, yes –– Whether particular items in the service charges are disbursements –– In the circumstances of the case, no –– Appeal dismissed
  • The Serpentine Trust Ltd v Revenue and Customs [2014] UKFTT 876 – VAT – mixed bag of benefits to supporters making ‘donations’ to charity – whether benefits supplied ‘for’ the ‘donations’ – yes – whether single or multiple supplies – single – whether element of single supply could be zero rated – no – nature of single supply – standard rated – appeal dismissed
  • TJ Charters LLP v Revenue and Customs [2014] UKFTT 896 – VAT – output tax – motor yacht acquired, intended to be used for chartering business with some private use – input tax on purchase of vessel recovered in full – no material records of private use – whether appropriate to apply Lennartz method of accounting for output tax – whether input tax should instead have been apportioned – whether assessment out of time under s 73(6)(b) VATA – appeal allowed in part
  • Tyne Valley Motorhomes v Revenue and Customs [2014] UKFTT 969 – VAT – zero rating –vehicles converted for disabled persons

New Zealand

Taxation Review Authority

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