VAT update - January 2020

In this month’s update we report on (1) changes to the rules relating to distance selling; (2) changes to VAT for intra-EU chain transactions and zero rated goods; and (3) HMRC’s guidance on proposed changes to the VAT treatment of call-off stock arrangements. We also comment on three recent cases which consider (1) whether VAT zero rating is available for electronic editions of newspapers; (2) the scope and meaning of “services of consultants”, for the purposes of Article 59(c), Principal VAT Directive; and (3) the deductibility of input tax on fees incurred in implementing a tax scheme.

News items

Changes to the rules relating to distance sales

On 2 December 2019, Council Directive 2019/1995, which seeks to introduce changes to the rules relating to distance sales, was published in the Official Journal. This publication follows the formal adoption by the Education, Youth, Culture and Sport Council on 22 November 2019. Read more

Changes to VAT for intra-EU chain transactions and zero rated goods

On 19 December 2019, the Value Added Tax (Place of Supply of Goods) Amendment Order 2019 (SI 2019/1507) (the Amendment Order) and the Value Added Tax (Amendment) (No 2) Regulations 2019 (SI 2019/1509) (the Amendment Regulations) were made, introducing changes to UK law required by Council Directive (EU) 2018/1910 (the Directive). Read more

HMRC publishes guidance on the proposed changes to the tax rules for call-off stock arrangements

On 23 December 2019, HMRC published new guidance on the proposed changes to the VAT treatment of call-off stock provided for by Council Directive (EU) 2018/1910 (the Directive) and
Council Implementing Regulation (EU) 2018/1912. Read more

Cases

News Corp – digital newspapers are “newspapers” for VAT purposes

In News Corp UK & Ireland Ltd v HMRC [2019] UKUT 0404 (TCC), the Upper Tribunal (UT) has reversed the decision of the First-tier Tribunal (FTT) and held that digital versions of newspapers fall within item 2, Group 3, Schedule 8, VATA 1994 and are zero-rated for VAT purposes. Read more

Gray & Farrar International – the services supplied by a matchmaking business did not fall within the “services of consultants”

In Gray & Farrar International LLP v HMRC [2019] UKFTT 684, the First-tier Tribunal (FTT) has held that the matchmaking services supplied by the taxpayer went beyond the provision of “services of consultants”, for the purposes of Article 59(c), Principal VAT Directive 2006/112. Read more

Taylor Pearson – input tax on fees incurred in implementing a tax scheme was deductible

In Taylor Pearson (Construction) Ltd v HMRC [2019] UKFTT 691 (TC), the First-tier Tribunal (FTT) has held that input tax on fees incurred in implementing a tax scheme, intended to remunerate directors in a tax efficient manner, was deductible. Read more