HMRC’s revised guidance on early termination payments and several advocate general opinions are among the recent VAT developments reviewed by Jo Crookshank and Gary Barnett (Simmons & Simmons).
VAT and contractual termination payments
The VAT treatment of compensation payments – and in particular contractual termination payments – has long been problematic with contradictory UK case law on the issue. In two recent cases MEO (Case C-295/17) and Vodafone Portugal case (Case C-43/19) the CJEU concluded that contractually agreed payments made by a customer terminating a contract were part of the price agreed by the customer for the services it received under that contract.
These decisions called into question HMRC’s practice treating contractual termination payments as outside the scope of VAT. As a result HMRC issued Revenue & Customs Brief 12/2020 in September 2020 reversing its earlier policy. The change in policy was suspended however in...
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HMRC’s revised guidance on early termination payments and several advocate general opinions are among the recent VAT developments reviewed by Jo Crookshank and Gary Barnett (Simmons & Simmons).
VAT and contractual termination payments
The VAT treatment of compensation payments – and in particular contractual termination payments – has long been problematic with contradictory UK case law on the issue. In two recent cases MEO (Case C-295/17) and Vodafone Portugal case (Case C-43/19) the CJEU concluded that contractually agreed payments made by a customer terminating a contract were part of the price agreed by the customer for the services it received under that contract.
These decisions called into question HMRC’s practice treating contractual termination payments as outside the scope of VAT. As a result HMRC issued Revenue & Customs Brief 12/2020 in September 2020 reversing its earlier policy. The change in policy was suspended however in...
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If you do not subscribe but are a registered user, please enter your details in the following boxes:
