In this month’s round-up of VAT cases, Graham Elliott examines the rulings on exempt services in Target Group, VAT group backdated exemption in Dollar Financial and judicial review at issue in KSM Henryk Zeman
Definition of exempt service of money transmission
The Court of Appeal decision in Target Group Limited (EWCA Civ 1043) does not change the decisions of the First Tier Tribunal or the Upper Tribunal (to the effect that the appellant’s services are not exempt), but the tenor of the decision and its implications (if not successfully appealed) are worthy of note.
The issue is whether Target’s services, to a lender, amount to an exempt service relating to moving of money between accounts, or whether that service is either essentially of administration, or of ‘debt collection’ (in which cases exemption would not apply).
This has been a fraught issue since the Bookit and DPAS litigations. It asks the basic question of where we should draw the line in defining an exempt service of money transmission or of the taxable role of ‘debt collection’. If the Court’s decision prevails, and if no further argument that repudiates the Court of Justice of the EU (CJEU) precedent is successful, then it appears there is little room to draw the line at all.
The
