V@ update - June 2020

Welcome to RPC's V@, a monthly update on developments in the VAT world that may impact your business. In this month’s update we report on (1) VAT treatment on fixed odds betting terminals and gaming machines; (2) VAT treatment of property search fees charged by solicitors and conveyancers; and (3) domestic reverse charge VAT for construction services ­delay in implementation.

We also comment on three recent cases which consider (1) Advocate General opines that pension fund management services by non-­insurers are not exempt from VAT; (2) purchaser using a UK VAT number was not liable for UK acquisition VAT where goods were housed in an overseas warehousing regime; and (3) whether tax authority must pay undisputed part of claim for input VAT pending investigation into other elements of the claim.

News items

VAT treatment on fixed odds betting terminals and gaming machines

HMRC has published a policy paper concerning the VAT treatment on fixed odds betting terminals and gaming machines. The brief explains HMRC’s position after the joint decision of the Upper Tribunal (UT) on 15 April 2020 in The Rank Group Ltd UT/2018/0149 and Done Brothers (Cash Betting) Ltd (and others) UT/2018/0150. Read more

VAT treatment of property search fees charged by solicitors and conveyancers

HMRC has published a policy paper announcing the withdrawal of the postal concession in relation to the VAT treatment of property search fees charged by conveyancers and solicitors. Read more

Domestic reverse charge VAT for construction services ­ delay in implementation

HMRC has published a policy paper delaying the implementation of the domestic reverse charge for construction services. A domestic reverse charge means that, instead of the UK supplier, the UK customer who receives supplies of construction services must account for the VAT due on these supplies on their VAT return. Read more

Cases

United Biscuits (Pension Trustees) ­- Advocate General opines that pension fund management services by non­-insurers are not exempt from VAT

In United Biscuits (Pension Trustees) Limited and Another v HMRC Case C¬235/19, trustees of a pension scheme that received services from various investment managers, including non­insurers, sought recovery of historic VAT paid on services provided by the non­insurers, claiming these should have been exempt from VAT. HMRC treated supplies of pension fund management as exempt, but only where the supplier was authorised to conduct insurance business. The taxpayers argued that the principles of equality and neutrality required such supplies to be treated as exempt, regardless of the need for any authorisation. The Court of Appeal referred the question of whether the investment management services were exempt insurance transactions within Article 135(1)(a) of Council Directive 2006/112/EC (Directive) (and its predecessor provisions), to the Court of Justice of the European Union (CJEU). Read more

Ampleaward -­ purchaser using a UK VAT number was not liable for UK acquisition VAT where goods were housed in an overseas warehousing regime

In Ampleaward Ltd v HMRC [2020] UKUT 0170 (TCC), the UT has found in favour of the taxpayer, and confirmed that HMRC was not entitled to claim UK acquisition VAT on the purchase of alcohol from a supplier situated in a second EU state, which was then delivered to a tax warehouse in a third EU state. Read more

AGROBET CZ – tax authority must pay undisputed part of claim for input VAT pending investigation into other elements of the claim

In AGROBET CZ, s.r.o. v Finanční úřad pro Středočeský kraj (C¬446/18), the CJEU has, following the opinion of the Advocate General, confirmed that the Czech Republic tax authority cannot delay the recovery of input VAT pending an investigation into other elements of the taxpayer’s VAT claim as the amount of excess VAT was clear, precise and unequivocal. Read more

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