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 01/21 included: the end of the Brexit transition period; the new zero rate for sanitary protection; the consultation on value shifting; and two cases, the Upper Tribunal (UT) decisions about grant funded education and a case which has resulted in probably the last Court of Justice of the European Union (CJEU) VAT referral by the UK, on the validity of the deeming provisions in Article 9a of the Implementing Regulations.
This issue begins with confirmation of the end of the transition period and the impact all the new forms and requirements have had on trade with the EU, even with the no tariff deal. We also highlight a welcome change that was only possible because of Brexit – the new zero rate for sanitary protection. Then we cover a recent consultation on value shifting – HMRC are proposing to change the rules around calculating the VAT due where a bundle of items with different VAT rates are sold for a discounted single price, so as to create certainty and a level playing field, but it could be more complicated than HMRC may think. Finally we look at two VAT cases. Colchester Institute Corporation is an interesting UT decision about the meaning of third party consideration in the context of grant funded ‘free’ further education, and the impact on a Lennartz arrangement of such education becoming a supply for third party consideration. It also looks at the set off rules in s81(3A) VATA 1994. The First-tier Tribunal in Fenix has made an eleventh-hour referral to the CJEU about Article 9a of the Implementing Regulations and whether it is merely clarifying the Directive or is an impermissible alteration to the Directive.
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