Katie Oliver and Gary Barnett (Simmons & Simmons) examine this month’s key VAT developments.
Intra-group VAT services and time of supply
How do you reconcile the application of two deeming provisions within the VAT legislation when there is no explicit order of priority? That is essentially the problem that faced the Court of Appeal (CA) in The Prudential Insurance Company Ltd v HMRC [2024] EWCA 300 when deciding if a performance fee due from a taxpayer to the representative member of its VAT group was subject to VAT when payment was delayed until after it had left the VAT group. Transactions within a VAT group are deemed not to give rise to supplies but on the other hand the time of supply rules deem the supply to be made when payment was made. Which takes priority?
The difficulty of reconciling this ‘chicken and egg’ problem is perhaps best demonstrated...
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Katie Oliver and Gary Barnett (Simmons & Simmons) examine this month’s key VAT developments.
Intra-group VAT services and time of supply
How do you reconcile the application of two deeming provisions within the VAT legislation when there is no explicit order of priority? That is essentially the problem that faced the Court of Appeal (CA) in The Prudential Insurance Company Ltd v HMRC [2024] EWCA 300 when deciding if a performance fee due from a taxpayer to the representative member of its VAT group was subject to VAT when payment was delayed until after it had left the VAT group. Transactions within a VAT group are deemed not to give rise to supplies but on the other hand the time of supply rules deem the supply to be made when payment was made. Which takes priority?
The difficulty of reconciling this ‘chicken and egg’ problem is perhaps best demonstrated...
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:
