This month's review of VAT cases and VAT news from Graham Eliiot, director of City & Cambridge Consultancy, including Vacation Rentals VAT exemption, split supplies reverse charge, ‘no show’ payments, claims for non-EU businesses, food and beverages and DIY claims
Judicial Review of VAT decision
It has often been remarked that taking ‘JR’ on a VAT issue is a doomed strategy, but that was not the case for Vacation Rentals v HMRC (UKUT0383) which sought to defend its application of the terms of Business Brief 18/06 in which HMRC (wrongly, as it later turned out) conceded that payment transfer services, such as in Bookit, were exempt.
HMRC assessed Vacation Rentals on the basis that the Brief was sufficiently ambiguous, and the tax payer sufficiently ‘sophisticated’ to suggest that they ought to have known better and were not being conspicuously unfairly treated if HMRC collected the correct amount of tax. The Upper Tribunal considered whether the Brief was ambiguous in the context of the relevant points at issue and held that it was not. It considered the contention that that the tax payer was so sophisticated that it should have ignored the Brief and paid tax in defiance of it and found that argument extremely unattractive. It therefore decided in favour of the tax payer.
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