VAT update May 2019

Published on 30 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.

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