Unexpected VAT consequences of devolved status

Sarah Kay, tax writer at Croner-i, considers an Upper Tribunal case where care services where taxable in England but exempt in Scotland and Northern Ireland due to different VAT rules and a variance in statutory regulation

The Upper Tribunal recently heard two joined appeals from commercial companies which provide day care for vulnerable adults ([2019] UKUT 0002). The companies were unhappy that the care they provide is subject to VAT in England and Wales, but the same care is exempt from VAT when provided in Scotland and Northern Ireland.

As explained in this article, the difference in VAT treatment did not arise from a difference in the VAT legislation which applies in devolved regions of the UK. It arose due to a difference in statutory regulation.

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