In this month’s update we report on HMRC’s cooperation agreement, intended to tackle online VAT fraud; HMRC’s recently published Guidance on online marketplace seller checks; and the government’s pilot for Making Tax Digital for VAT.
We also comment on three recent cases involving consideration of the Halifax principle; VAT recovery and hire purchase transactions; and what constitutes a "payment" for the purposes of a claim under section 80(1B), Value Added Tax Act 1994, for overpaid output tax.
Tackling online VAT fraud – HMRC publishes its cooperation agreement
On 25 April 2018, HMRC announced that it had published an agreement between itself and online marketplaces to help tackle online VAT fraud on their platforms.
HMRC guidance on online marketplace seller checks – joint liability risk for online marketplaces
On 15 March 2018, section 38, Finance Act 2018, came into force. This provision amends the Value Added Tax Act 1994, in the case of goods sold through online platforms such as eBay, Amazon and Gumtree.
Making Tax Digital
HMRC has confirmed that a live pilot for Making Tax Digital (MTD) for VAT began on 10 April 2018 before becoming mandatory for all businesses and landlords in April 2019.
Newey – consideration of the Halifax principle
In the long running case of HMRC v P Newey (t/a Ocean Finance)  EWCA Civ 791, the Court of Appeal has decided to remit the case back to the First-tier Tribunal (FTT) for further consideration. The Court considered that the Court of Justice of the European Union (CJEU), on referral of the case after the FTT’s original decision, had adopted a new approach to the application of the Halifax principle (C-255/02).
Volkswagen Financial Services – AG’s opinion on VAT and hire purchase transactions
On 3 May 2018, Advocate General Spuznar released his opinion in Volkswagen Financial Services UK Ltd (C153/17), in which he expressed the opinion that the current UK VAT treatment of vehicle purchase agreements is incorrect.
Rank Group – validity of section 80 claims
In Rank Group plc v HMRC  UKFTT 0251 (TC), the FTT has decided that there was no valid claim under section 80(1B) Value Added Tax Act 1994 (VATA) and that the "set off" provisions of sections 81(3) and 81(3A) VATA, did not result in the taxpayer making a "payment" to HMRC.