HMRC Brief on partial exemption calculations for HP transactions following the CJEU decision in VWFS

Following the 2018 CJEU decision in the case of VW Financial Services (UK) Ltd (VWFS see here), HMRC has issued Brief 8/2020 setting out their updated view of how recoverable overhead input VAT should be determined by businesses that supply...

Imminent withdrawal of ability to backdate Housing Association partial exemption special methods (PESM)

Housing Association clients of the VAT team are being told by HMRC that they will be removing the special provision granted to Housing Associations allowing them to backdate a PESM four years. Apparently this is due to be removed from...

Summary of recent indirect tax cases – Summer 2019

highlightsThis article provides a short summary of some recent indirect tax cases. Please get in touch with a member of the Mazars indirect tax team to discuss issues arising from any of the points discussed. Employment tax and VAT on...

Increased complexity for input VAT recovery of an EU branch of an overseas EU company

The CJEU decision in Morgan Stanley has clarified how EU branches should be recovering input VAT on costs incurred in providing services to their overseas European head offices.  Unfortunately it is likely to make the VAT compliance process in each...

Splitting a single supply of management services into VAT exempt and taxable services

In the case of Blackrock Investment Management (UK) Ltd (Blackrock), the Upper Tribunal (UT) has agreed with the First tier Tribunal (FTT) that the ‘Aladdin platform management services’ provided to it by its US group company could be regarded as...

Input VAT on HP company overheads passed on to customers

In the case of VWFS (case c-153/17) the CJEU has held that even where overhead costs of a hire purchase (HP) business are passed on to the customer as part of the finance charge for the transaction, when calculating the...

Partial exemption calculations for financial institutions with foreign branches

The Advocate General has issued the CJEU opinion in the case of Morgan Stanley (case C-165/17).  The opinion is not yet available in English, so the link provided is to the French translation.  The opinion, if followed by the CJEU,...

Whether input VAT on Cambridge University’s investment management fees is residual input VAT

The Court of Appeal has decided to refer to the CJEU  the question of whether input VAT on Cambridge University’s investment management fees were residual overheads of the University’s overall business (and so subject to a PESM apportionment), or were...

Partial Exemption – applicability of special method

An important reminder to consider whether a partial exemption special method (PESM) will remain applicable after a change in circumstances. In a recent decision in the First Tier Tribunal (FTT) regarding Dynamic People Ltd, the judge commented that she was...

VAT partial exemption planning – Huddersfield University loses appeal

The Upper Tribunal, in overturning the FTT, have decided that structuring by the University of Huddersfield (HU) to mitigate irrecoverable VAT on the cost of refurbishing a building should be disregarded. (more…)

VAT partial exemption – principles of allocation for standard method

Businesses that make both taxable and exempt supplies that use the standard partial exemption (PE) method must so far as possible allocate supplies they receive to their taxable and exempt activities.  A portion of the VAT on residual supplies is...