Read Talking Points to keep up to date on recent Indirect Tax developments.
Talking Points is a weekly newsletter covering recent developments in Indirect Tax. We will highlight the most significant items in Tax Matters Digest so readers are aware of issues that may be relevant and can read on for more details where applicable. Issue 31/20 included: First-tier Tribunal decisions concerning the offshoring of a loan intermediation business to Jersey and the VAT treatment of payment for entry to an ice rink and children’s skate hire, as well as a European Judgment concerning a taxpayer extending a public road for a local authority as part of a deal to operate a quarry. Issue 32/20 included: The temporary reduced rate extension and a longer period to pay VAT that was due between 20 March and 30 June 2020 but was deferred, new Building and construction services reverse charge guidance and “Revenue and Customs Brief 14 (2020): changes to the methods used by opticians and sellers of hearing aids to account for VAT on their supplies”.
This week’s edition reports on the Paul Newey (t/a Ocean Finance) First-tier Tribunal (FTT) decision. This concerns the offshoring of a loan intermediation business to Jersey. The case had previously reached the Court of Appeal who remitted the case back to the FTT. The current FTT, like the first, found for the taxpayer finding that the advertising supplies in question took place in Jersey so no UK VAT was due, and that the arrangements were not abusive. Also this week we report on the European Judgment in Mitteldeutsche Hartstein-Industrie (C-528/19). This concerns the taxpayer extending a public road for a local authority as part of a deal to operate a quarry. The Court has confirmed that where input tax relates to a service which benefits a third party, input tax deduction is not precluded as long as there is a link to the taxpayer’s economic activity. In another case remitted to the FTT, The Ice Rink Company and Plant Ice (Milton Keynes) Ltd case concerns the VAT treatment of payment for entry to the rink and children’s skate hire, concluding there were two supplies.
As well as the extension to the temporary reduced rate and a longer period in which to pay VAT that was deferred, this week’s edition also briefly reports on new building and construction services reverse charge guidance. HMRC have published this, following guidance ahead of the introduction of this reverse charge from 1 March 2021. Also this week we report on “Revenue and Customs Brief 14 (2020): changes to the methods used by opticians and sellers of hearing aids to account for VAT on their supplies”. This is for opticians that dispense spectacles or contact lenses to customers and make two supplies for VAT purposes: the spectacles or lenses themselves (standard rate) and a supply of dispensing services (exempt from VAT). Similarly, dispensers of hearing aids make a supply of hearing aids (standard rate) and dispensing services (exempt).
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