P Newey (t/a Ocean Finance) v HMRC

In P Newey (t/a Ocean Finance) v HMRC [2020] UKFTT 366 (TC) (14 September) the FTT found that a VAT-saving arrangement involving Jersey companies did not amount to an abuse of law for VAT purposes and as a result HMRC was not entitled to assess VAT by recharacterising the transactions to counteract the alleged abuse. 

Mr Newey made VAT-exempt supplies of loan-broking services in the UK. He also incurred VAT on advertising services supplied to him. He was not able to recover this VAT so he set up a company in Jersey (which is outside the EU) called Alabaster. Alabaster continued to operate the loan-broking business under Mr Newey’s trading name (Ocean Finance) and received advertising services from a Jersey-based advertising company. No VAT was accounted for on the advertising services on the basis that it was supplied between two Jersey companies and so...