Tax Journal VAT Review for November 2020

This article was first published in the 6 November 2020 edition of Tax Journal who have agreed to Simmons & Simmons making it available online.

This month's review covers the CJEU decision in the United Biscuits case which may wrap up the long series of cases since the original Wheels appeal on the application of the VAT exemption for fund management services to pension funds. There is also confirmation from the CJEU that the mere fact that a third-party benefits from expenditure incurred by a taxpayer does not mean that the taxpayer's ability to recover input VAT on that expenditure is restricted. Another long running case, the Ocean Finance economic reality case, has returned to the FTT which has reaffirmed its original 2010 decision that arrangements involving sub-contracting large parts of the business to a connected entity to obtain a VAT advantage were not abusive. Finally, HMRC has released further guidance on the ability of persons to recover input VAT on imports of goods which will be particularly important in the context of postponed accounting due to come in from 1 January 2021.