VAT update - March 2020
In this month’s update we report on (1) HMRC’s recently published policy paper in relation to the VAT liability of digital publications; (2) EU Council Regulation (EU) 2020/283 and Council Directive (EU) 2020/284 in relation to combatting VAT fraud; and (3) EU Council Directive (EU) 2020/285 in relation to the special scheme for small enterprises. We also comment on three recent cases which consider (1) whether a specific form is required for the notification of an assessment of VAT; (2) when VAT is collectable as a debt due; and (3) what constitutes a reasonable excuse for incorrectly issuing a zero-rating VAT certificate.
News items
HMRC publishes policy paper in relation to the VAT liability of digital publications
On 19 February 2020, HMRC published a policy paper confirming that HMRC’s VAT treatment of supplies of digital newspapers and other digital publications has not changed following the Upper Tribunal’s decision in News Corp UK and Ireland Ltd (UT/2018/0065) (News Corp). Read more
Publication of EU legislation to combat VAT fraud
On 2 March 2020, the following two acts, relating to measures designed to assist with the detection of VAT fraud, were published in the Official Journal of the European Union. Read more
Publication of EU legislation reforming the special scheme for small enterprises
On 2 March 2020, Council Directive (EU) 2020/285, amending Directive 2006/112/EC on the common system of VAT as regards the special scheme for small enterprises, and Regulation (EU) No 904/2010, regarding the administrative cooperation and exchange of information for the purpose of monitoring the correct application of the special scheme for small enterprises, were published in the Official Journal of the European Union. Read more
Cases
Aria Technology – No specific form required for notification of assessment of VAT
In Aria Technology Ltd v HMRC [2020] EWCA Civ 182, the Court of Appeal confirmed that there is no particular form or formality required for an assessment under section 73(1), Value Added Tax Act 1994 (VATA) and an assessment can be contained in more than one document as long as the minimum requirements are set out in a clear and unambiguous way. Read more
Rhino Television & Media – VAT collectable as a debt due as soon as assessment is notified to the taxpayer
In HMRC v Rhino Television & Media Ltd [2020] EWHC 364 (Ch), the High Court confirmed that the deeming due provision, contained in section 73(9), VATA, following the issue of a VAT assessment, does not require the expiry of any review or appeal period and that cross-undertakings in damages on freezing order applications are not required from a public authority when it is performing its public function. Read more
Marlow Rowing Club – Charity had a reasonable excuse for incorrectly issuing a zero-rating certificate
In Marlow Rowing Club v HMRC [2020] UKUT 0020 (TCC), the Upper Tribunal (UT) held that a charity which relied on advice received from accountants and counsel had a reasonable excuse for incorrectly issuing a zero-rating certificate to the supplier of construction services. Read more