Indirect Tax Update 08/2014: Indirect Tax Update for week ending 21 February 2014

67 %
33 %
Information about Indirect Tax Update 08/2014: Indirect Tax Update for week ending 21...

Published on February 24, 2014

Author: GrahamBrearley


Indirect Tax Update 08/2014 Indirect Tax Update for week ending 21 February 2014 With the Court of Justice on yet another holiday, attention turns to the UK Tribunal this week. Two important decisions have been released. Firstly, in the case of Avon Cosmetics ltd, where the Tribunal has confirmed that the 'party-plan' derogation operated by the UK is invalid and secondly, In the Way Ahead Group decision, the Tribunal confirms that a ticket agent's 'booking' fee is exempt from VAT. In Avon Cosmetics Ltd – The First-tier Tribunal has confirmed that the long-standing 'party-plan' derogation operated by the UK is invalid. The derogation was authorised by the EU Council in 1985 and allows HMRC to impose a market value on the supply of goods through a party-plan type chain where, ultimately, the retail sale to the final consumer is through a non-VAT registered business. Avon Cosmetics Ltd has asserted that, whilst it has no objection to a market value direction, the fact that a direction does not allow for input VAT incurred by the non-VAT registered sellers to be offset (and thus reduce its overall liability) offends the principle of neutrality inherent in the VAT system. In principle, the First-tier Tribunal agrees entirely with Avon Cosmetics. However, it is unclear how it is to remedy the situation and has decided to refer the matter to the Court of Justice. HMRC has, as expected, confirmed that it will seek leave to appeal to the Upper Tribunal on the question of whether the matter should be referred to the Court of Justice and the Tribunal has decided to delay such a referral until the outcome of HMRC's appeal on the point has been decided. For further information in relation to any of the issues highlighted in this Indirect Tax Update please contact: London/South East Karen Robb The Regions Stuart Brodie The Midlands Mike Sheppard Comment – There appear to be two remedies available. The first involves interpreting the derogation in such a way that credit for input tax is given. The second involves a finding that, as the derogation infringes the principle of fiscal neutrality, the whole of the derogation must be invalid. This could open some fairly serious floodgates allowing affected taxpayers the possibility of making substantial claims. In Way Ahead Group Ltd, the Tribunal has confirmed that a 'booking' fee charged by a ticket agent to customers paying by credit or debit card constitutes a supply of card handling services which is exempt from VAT. HMRC had claimed that the supply was a single supply of ticketing services and that there was no separate supply of payment handling services. The Tribunal found for the taxpayer. On the facts and evidence, the ticket agent supplied a single 'payment handling' service which was exempt from VAT. Comment – another case in the long line of SDC – Bookit – NEC. HMRC even tried to argue that, following the case of AXA (Denplan), what was being supplied was debt collection services. The Tribunal did point out that the ticket agent's service was to the customer and not to the creditor so, logically, could not be collection of a debt due to the promoter! © 2014 Grant Thornton UK LLP All rights reserved ‘Grant Thornton’ means Grant Thornton UK LLP, a limited liability partnership Grant Thornton UK LLP is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. Services are delivered by the member firms. GTIL and its member firms are not agents of, and do not obligate, one another and are not liable for one another's acts or omissions. This publication has been prepared only as a guide. No responsibility can be accepted by us for loss occasioned to any person acting or refraining from acting as a result of any material in this publication.

Add a comment

Related presentations

Les changements sur le marché du distressed aux Etats-Unis et en Europe

Main Sections of the Report 1) Nifty Technical View 2) 4 Large Cap Trade Ide...

This presentation consits the yearly results of Kinepolis Group

Related pages

Indirect Tax Update 33/2014 - Law - documents

Indirect Tax Update 08/2014: Indirect Tax Update for week ending 21 February 2014
Read more

Indirect Tax Update 18/2014 - Economy & Finance

Indirect Tax Update 08/2014: Indirect Tax Update for week ending 21 February 2014
Read more

1000+ ideas about Indirect Tax on Pinterest | Behavioral ...

Find and save ideas about Indirect Tax on Pinterest, the world's catalogue of ideas. | See more about Behavioral Interview, ...
Read more

International Tax Review

International Tax Review gives you up-to-date news and analysis on ... Asia-Pacific indirect tax update: ... International Tax Review Products. TP Week;
Read more

French Tax Update - French Finance Bills - Tax - France

This first French Tax Update ... French Tax Update ... a vote in favour of leaving the EU could have significant implications for direct and indirect tax ...
Read more

Tax: Tax news - PwC UK blogs

344 posts categorised "Tax news" ... post in a series blogs around the indirect tax ... efforts to update international tax rules for ...
Read more

... Technical & Fundamental Analysis, Latest Update, News ... for ending corporate tax ... of the total indirect tax collected in 2014 ...
Read more

Americas Tax Center Weekly Roundup Archive main - EY

Americas Tax Center Weekly ... Treaty of the Hague Convention * EY’s ‘Indirect tax in 2016’ released. February ... 2014. November 21 ...
Read more

Central America, Panama and Dominican Republic global tax ...

Indirect Tax; Compliance ... Central America, Panama and Dominican Republic global ... their shareholders was actually expected to be released in February ...
Read more