In Cabvision v HMRC (TC03101 – 29 November 2013) Cabvision had sold software to an LLP (Taxi) and had paid output tax on the consideration received from Taxi. The issue was whether this output tax had actually been due on the whole contractual price.
Taxi’s purchase of the software was funded 25% by subscriptions from investors (wishing to boost their investment with the use of capital allowances) and 75% by a loan that Taxi took out with Lloyds TSB Bank PLC which was guaranteed by Bank of Scotland and which in turn was secured by a deposit made by Cabvision. The arrangements were similar but not identical to those in Tower MCashback [2011] UKSC 19. There was no suggestion that Cabvision had any VAT avoidance purpose in entering into the arrangement.
The tribunal first rejected Cabvision’s interpretation of the Sixth VAT Directive article...
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In Cabvision v HMRC (TC03101 – 29 November 2013) Cabvision had sold software to an LLP (Taxi) and had paid output tax on the consideration received from Taxi. The issue was whether this output tax had actually been due on the whole contractual price.
Taxi’s purchase of the software was funded 25% by subscriptions from investors (wishing to boost their investment with the use of capital allowances) and 75% by a loan that Taxi took out with Lloyds TSB Bank PLC which was guaranteed by Bank of Scotland and which in turn was secured by a deposit made by Cabvision. The arrangements were similar but not identical to those in Tower MCashback [2011] UKSC 19. There was no suggestion that Cabvision had any VAT avoidance purpose in entering into the arrangement.
The tribunal first rejected Cabvision’s interpretation of the Sixth VAT Directive article...
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