VAT update - February 2020

In this month’s update we report on (1) publication by the EU of the Implementing Regulation (EU) 2020/21; (2) publication by HMRC of letters to businesses regarding preparations for customs and border arrangements after the Brexit transition period; and (3) the new Value Added Tax (Miscellaneous Amendments, Revocation and Transitional Provisions) (EU Exit) Regulations 2019 (Appointed Day No. 1) (EU Exit) Regulations 2020. We also comment on three recent cases which consider (1) the application of the Halifax principle to what HMRC considered to be VAT avoidance arrangements involving supplies of winter sports training; (2) whether there is a private right of action to enforce the statutory duty to provide a VAT invoice; and (3) whether the general partner of a property fund was entitled to recover VAT incurred on set-up and operating costs.

News items

Publication of European Commission Implementing Regulation (EU) 2020/21

On 15 January 2020, the EU published, in the Official Journal, the Commission Implementing Regulation (EU) 2020/21, amending Implementing Regulation (EU) 79/2012, laying down detailed rules for implementing certain provisions of Council Regulation (EU) 904/2010 concerning administrative co-operation and combating fraud in the field of VAT.  Read more

HMRC has published letters to VAT-registered businesses regarding preparations for customs and border arrangements after the Brexit transition period

On 27 January 2020, HMRC published letters to VAT-registered businesses in Great Britain and Northern Ireland which trade with the EU, or with the EU and the rest of the world.  Read more

Value Added Tax (Miscellaneous Amendments, Revocation and Transitional Provisions) (EU Exit) Regulations 2019 (Appointed Day No. 1) (EU Exit) Regulations 2020

On 30 January 2020, the Treasury made the Value Added Tax (Miscellaneous Amendments, Revocation and Transitional Provisions) (EU Exit) Regulations 2019 (Appointed Day No. 1) (EU Exit) Regulations 2020.  Read more

Case Reports

Snow Factor – Tribunal applies the Halifax principle to redefine supplies of winter sports training

In Snow Factor Ltd and Snow Factor Training Ltd v HMRC [2019] UKFTT 0664 (TC), the First-tier Tribunal (FTT) found that certain VAT arrangements were abusive within the scope of the Halifax principle, and redefined supplies of winter sports training by a non-profit making company as a supply by its profit making parent and therefore as falling outside the education exemption in Item 1, Group 6, Schedule 9, Value Added Tax Act 1994 (VATA).  Read more

Royal Mail – There is no private right of action to enforce the statutory duty to provide a VAT invoice

In Claimants in the Royal Mail Group Litigation v Royal Mail Group Ltd [2020] EWHC 97 (Ch), the High Court found that a customer cannot enforce the statutory duty for a supplier to provide a VAT invoice.  Read more

Melford Capital – General partner of a property fund was entitled to fully recover VAT incurred on set-up and operating costs