VAT update - January 2019

In this month’s update we report on (1) refunds of VAT in the UK for non-EU businesses; (2) changes to the VAT treatment of retained payments; and (3) revised HMRC guidance on when and how to account for VAT when you transfer a business as a going concern. We also comment on three recent cases involving (1) irrecoverable output tax; (2) the deductibility of a repayment supplement from an interest award; and (3) whether a taxpayer had a legitimate expectation that HMRC guidance could be relied upon.

News items

Revenue and Customs Brief 12 (2018): refunds of VAT in the UK for non-EU businesses

On 12 December 2018, HMRC published Revenue and Customs Brief 12 (2018), which sets out action that non-EU businesses may need to take if HMRC has rejected their claims for refunds of UK VAT (overseas VAT refund claims) for the prescribed years 2016-2017 and 2017-2018. Read more.

Revenue and Customs Brief 13 (2018): change to the VAT treatment of retained payments

On 14 December 2018, HMRC published Revenue and Customs Brief 13 (2018), which sets out changes to HMRC’s policy on VAT payments for unfulfilled supplies. Read more.

VAT Notice 700/9: revised HMRC guidance on TOGC

On 6 December 2018, HMRC published a revised version of VAT Notice 700/9, providing guidance on when and how to account for VAT when you transfer a business as a going concern (TOGC). Read more.

Case Reports

J&B Hopkins: irrecoverable output tax

In J&B Hopkins Ltd v HMRC, the Upper Tribunal (UT) has upheld a VAT assessment, even though the taxpayer had not charged VAT and was unable to recover it as the recipient of the supply had gone into liquidation. Read more.

Emblaze Mobility Solutions: no deduction of repayment supplement from interest award

In Emblaze Mobility Solutions Ltd v HMRC, the UT has held that a repayment supplement in respect of an input tax repayment should not be deducted from an interest award pursuant to section 84(8), VATA. Read more.

Vacation Rentals: taxpayer had legitimate expectation that HMRC guidance could be relied upon

In R (on the application of Vacation Rentals (UK) Ltd) (formerly The Hoseasons Group Ltd) v HMRC [2018] UKUT 383 (TCC), the UT has held that HMRC was bound by its published guidance in Business Brief 18/06 (BB18/06), which concerned the treatment of payments for card handling services. Read more.