In Shop Direct Group Ltd v HMRC (and related appeals) (TC01823 – 28 February) four companies which acted for VAT purposes as the representative members of large groups which carried on business as retailers had accounted for VAT on amounts which were subsequently accepted not to be due and had received substantial repayments together with statutory interest. They treated these repayments as outside the scope of corporation tax. HMRC issued amendments to their self-assessments charging corporation tax on the repayments and the companies appealed. The First-tier Tribunal dismissed the appeals holding that ‘the VAT repayments received by each of the appellants were trading receipts’ and that ‘the interest payments are chargeable to corporation tax under Case III of Schedule D’.
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In Shop Direct Group Ltd v HMRC (and related appeals) (TC01823 – 28 February) four companies which acted for VAT purposes as the representative members of large groups which carried on business as retailers had accounted for VAT on amounts which were subsequently accepted not to be due and had received substantial repayments together with statutory interest. They treated these repayments as outside the scope of corporation tax. HMRC issued amendments to their self-assessments charging corporation tax on the repayments and the companies appealed. The First-tier Tribunal dismissed the appeals holding that ‘the VAT repayments received by each of the appellants were trading receipts’ and that ‘the interest payments are chargeable to corporation tax under Case III of Schedule D’.
Why it matters: There is a great deal of...
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