In Rio Tinto v HMRC [2014] UKFTT 1059 (27 November 2014) the FTT found that no decrease in consideration had taken place after the supply.
The issue was whether a price adjustment which Rio Tinto had made in relation to management and administration services supplied to a group pension fund was a ‘decrease in consideration’ for the purpose of the Value Added Tax Regulations SI 1995/2518 reg 38.
The dispute related to pension investment costs incurred by Rio Tinto in the form of salary and related charges. Rio Tinto contended that these costs included administration costs which should not have carried VAT when recharged to the fund. Yet from 1973 to 2010 it had mistakenly charged VAT in respect of these expenses. It was in relation to these administration expenses that the alleged price adjustment was made. The Fleming [2008] UKHL 2 claim for repayment...
