VAT Update - January 2018

In this month’s update we report on the VAT treatment of pension fund management services for insurers; the establishment of the EU cross-border prosecution service; and guidance published by HMRC following the Supreme Court’s decision in Littlewoods.

We also comment on three recent cases involving refunds for overpaid VAT on investment management services for pensions; the lawfulness of the UK’s derogation for direct selling; and the application of section 80, VATA, to repayment claims for pre-1990 price adjustments.

News

Business Brief 3 (2017) – VAT treatment of pension fund management services
In our October 2017 VAT Update we reported on HMRC’s announcement that, with effect from 1 January 2018, it would withdraw the VAT exemption for pension fund management services for insurers. Read more

EU member states agree to establish cross-border fraud prosecutor
Following a European Commission report on the reform of the European Anti-Fraud Offce, 20 EU countries have agreed to set up an EU-wide prosecution service to investigate and bring to court cases involving the misuse of EU funds or large-scale VAT fraud.Read more

HMRC issues VAT refund interest guidance following the Littlewoods judgment
On 8 December 2017, HMRC published Revenue & Customs Brief 5 (2017), in which it confirms its position following the Supreme Court’s judgment in Littlewoods Limited and Others v HMRC [2017] UKSC 70. Read more

Case

United Biscuits – High Court rejects claims for refunds of overpaid VAT
In United Biscuits (Pension Trustees) Ltd and another v HMRC [2017] EWHC 2895 (Ch), the High Court has held that pension fund management services by non-insurers are standard rated and dismissed the claimants’ claims to recover VAT on investment management services for pensions. Read more

Avon Cosmetics – no deviation from derogation
In Avon Cosmetics Ltd C-306/16, the Court of Justice of the European Union (CJEU) has rejected a claim that a derogation from EU law which authorised the UK to charge VAT on sales by direct selling companies based on their open market value, was unlawful. Read more

Iveco – time limit for repayment claims for pre-1990 price adjustments
In Iveco Ltd v HMRC [2017] EWCA Civ 1982, the Court of Appeal has held that the time limit in section 80 VATA applied to a taxpayer’s claim for repayment of VAT. Read more