HMRC v Aimia Coalition Loyalty UK Ltd

The decision in HMRC v Aimia Coalition Loyalty UK Ltd (aka Loyalty Management Ltd) (No. 2) (Supreme Court – 20 June) follows on from the previous decision in HMRC v Aimia Coalition Loyalty UK Ltd (aka Loyalty Management Ltd) (No 1) (Supreme Court – 13 March). A company (L) operated a sales promotion scheme known as the ‘Nectar scheme’ which was intended to reward regular customers. Under the scheme customers who purchased goods from certain retailers received ‘loyalty points’ which they could use to acquire further goods or services from other specified suppliers. L paid the suppliers for these goods or services and reclaimed input tax. HMRC rejected the claim on the basis that the goods and services had been supplied to the individual customers rather than L.

The CA unanimously allowed L’s appeal applying the principles laid down in C...