Case Law Corner

Fortyseven Park Street Limited


Liability of supply of time share interests in land. 


The Upper Tier were tasked with deciding whether the supply of 'fractional land interests'  in a boutique London hotel constituted taxable supplies - 'the provision of accommodation in the hotel sector or sectors with a similar function'.

At first glance it might seem straightforward that the supply of timeshare type interests in a hotel were supplies within the hotel sector.

The Upper Tier found, however, that such supplies went 'well beyond the provision of accommodation in the hotel sector' citing amongst other things the fact that licensees were able to sub-let their interests.  
This is a significant case and may have implications for other  supplies within the hotel or serviced accommodation sector.  
Hastings Insurance Services
Place of Supply - Right to deduct input tax

The appellant provided brokering services to a connected offshore provider of insurance 'A'.

The case would turn on where A was established in relation to the intermediary services it received from the appellant.

HMRC argued that 'A' had a fixed establishment (FE) in the UK as well as a permanent establishment (PE) in Gibraltar.

The appellant argued there was no FE in the UK.

In the event of the apellant beng correct, the appellant would be entitled to input tax recovery under the Specified Supplies Order 1999.

In the event th at HMRC were correct the broking services would be exempt services supplied in the UK with the contingent impact of irrecoverable input tax.
The VAT legislation is not particularly clear on how to discern the presence of a FE.

Consequently, a lot of legal arguments were employed in trying to demonstrate that 'A' had (or didn't have) a sufficient  degree of permanence; or the requisite human and technical resources required for it to receive and consume supplies within the UK.

Owing to a lack of space a more detailed analysis may be found here.  However, in the event the Tribunal were not convinced that HMRC had demonstrated the existence of the FE.
If you need to discuss please call us. 
April 2018
A warm welcome to all our readers to the latest edition of The Eye. 
The newly updated disclosure rules have certaninly cast a dark shadow over the world of tax planning.  I have to admit that it has taken us some time to get to grips with the scope of the rules. 
New Avoidance Disclosure Rules
When HMRC announced the first raft of anti-avoidance legislation all those years ago it struck me as something of a mean spirited intervention. 

Of course, at the time, I was an impressionable VAT Senior and, having recently made the jump from HMC&E to the private sector I viewed tax planning through a soft focus lens, it was 'Us versus Them' a game of cat and mouse - we found the loopholes and they, in response, plugged them.

The grey areas were the field of play, So H MRC's introduction of rules which compelled taxpayers to disclose details of any schemes they were using or intending to use that might be outside the 'spirit of the law' seemed, well, outside the spirit of the law.
Of course I did not always consider the adverse impact of tax avoidance and I had also forgotten that I had no say in determining the rules of 'our' game.

Many years have now passed and in that time HMRC has tweaked and amended the original disclosure rules on a number of occasions. The recent changes see the publication of a new notice 'Disclosure of Tax Avoidance Schemes: VAT and other indirect taxes (DASVOIT)' which covers disclosure of indirect tax planning schemes w.e.f. Jan 2018 and an updated  Notice 700/8: disclosure of VAT avoidance schemes which deals with the rules for VAT up to Jan 2018.

The new notice summarises new legislation which requires enablers or promoters of indirect tax planning schemes to disclose tax planning arrangements.  Broadly, notification of such schemes is required where they contain certain tax planning hallmarks.   Where, under the old rules, disclosure was only required in very specific 'listed' circumstances or where very high turnover limits were exceeded, now it seems that all tax planning will be caught where tax avoidance is the prime motivation for adoption of a 'scheme'.  

How this will work in practice remains to be seen but, as the rules place additional notification obligations on advisors, I will no doubt be able to advise in due course.    

Full details can by clicking the link below.

VAT on the ground
Brexit - VAT and Duty in the transition period 
With the publication of the draft agreement concerning the UK's future relationship with the EU, we at least have some clarity over the timescales and the VAT and Duty arrangments following the official Brexit date in March next year. 

The much touted transitional period will effectively postpone any VAT & Duty changes until the end of 2020.  The draft agreement clarifies that transactions and movements of goods spanning this date will assume the same status - provided of course that the correct documentary evidence is held.

Do you require an EU VAT registration?

If you have hit distance selling thresholds or need to register for VAT in another EU member state we can help guide you through the process and offer an alternative to the Amazon one size fits all solution.
Assessments, Penalties & Surcharges
A simple plea.  Let us check them for you.  The law is the law and if HMRC make mistakes in issuing such notices they can be removed or reduced.
If we cannot assist in mitigating or removing an assessment or penalty we won't charge!
If you need to discuss any of the above items please contact Nick or Alan.

Update notices

HMRC has published the following updates:

Road Fuel Scale Charge tables Click here

Should I be registered for VAT Click here

Cancelling your VAT registration Click here