Sarah Bond and Will Robinson (Freshfields Bruckhaus Deringer) examine a (now final) Upper Tribunal decision on VAT recovery for loyalty schemes which endorses the Redrow approach.
Loyalty schemes offering ‘free’ goods or services provided by a third party typically benefit multiple parties: most obviously the loyalty scheme operator (or sponsor if different) on the one hand and the loyalty scheme member receiving the free reward on the other. Recovery of input tax by the loyalty scheme operator paying the third party in these circumstances has been a prime target for HMRC challenge the argument being that it is providing third party consideration for the rewards provided to members.
One might have expected that HMRC would abandon this line of argument after it was ultimately rejected by the Supreme Court in Loyalty Management UK ...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
Sarah Bond and Will Robinson (Freshfields Bruckhaus Deringer) examine a (now final) Upper Tribunal decision on VAT recovery for loyalty schemes which endorses the Redrow approach.
Loyalty schemes offering ‘free’ goods or services provided by a third party typically benefit multiple parties: most obviously the loyalty scheme operator (or sponsor if different) on the one hand and the loyalty scheme member receiving the free reward on the other. Recovery of input tax by the loyalty scheme operator paying the third party in these circumstances has been a prime target for HMRC challenge the argument being that it is providing third party consideration for the rewards provided to members.
One might have expected that HMRC would abandon this line of argument after it was ultimately rejected by the Supreme Court in Loyalty Management UK ...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
