VAT update May 2019

In this month’s update we report on (1) HMRC guidance on the correct treatment for the deduction of import VAT by non-owners of goods; (2) Regulations which introduce a VAT reverse charge on specified construction services; and (3) refunds of VAT in the UK for non-EU businesses.

We also comment on three recent cases relating to (1) whether VAT late payment interest constitutes default or commercial interest; (2) whether cashpoint operation services are exempt from VAT; and (3) the consequences of withdrawing a claim.

News items

HMRC guidance on the correct treatment for the deduction of import VAT by non-owners of goods

On 11 April 2019, HMRC published Revenue and Customs Brief 2 (2019), in which it explains the correct treatment for the deduction of import VAT paid by a taxable person who is not the owner of the relevant goods. Read more.

Regulations introduce VAT reverse charge for construction services

On 29 April 2019, HM Treasury made regulations introducing a VAT reverse charge on specified construction services. The regulations are effective from 1 October 2019. Read more.

Refunds of VAT in the UK for non-EU businesses

On 4 April 2019, HMRC updated Revenue and Customs Brief 12 (2018), in which it sets out action that non-EU businesses may need to take if HMRC has rejected their claims for refunds of UK VAT. Read more.

Cases

G4S Corporate Services – interest assessed is default interest not commercial interest

In G4S Corporate Services Ltd v HMRC, the First-tier Tribunal (FTT) has held that interest assessed under sections 74 and 75, VATA 1994, on late-paid VAT, is default interest intended to reflect the time value of money withheld from HMRC and is not commercial interest. Read more.

Cardpoint – cashpoint services not exempt from VAT (AG opinion)

On 2 May 2019, Advocate General (AG) Bot delivered his opinion in Finanzamt Trier v Cardpoint GmbH, in relation to the scope of the VAT exemption for financial services. The case concerns whether technical and administrative services provided to a bank operating cash point withdrawals falls within the VAT exemption. Read more.

Buckingham Bingo – failed attempt to resurrect a claim

In Buckingham Bingo Ltd v HMRC, the Upper Tribunal (UT) has upheld the decision of the FTT that once a taxpayer has foregone its appeal against an HMRC ‘appealable’ decision, it cannot resurrect its right of appeal. Read more.