M&S victorious in £3.5m VAT bunfight
Marks & Spencer prevails in 12-year VAT teacake battle with HM Revenue & Customs
Marks & Spencer prevails in 12-year VAT teacake battle with HM Revenue & Customs
After a 12-year struggle Marks & Spencer has finally won its battle with
HM Revenue & Customs to recover £3.5m in overpaid VAT on chocolate teacakes.
The European Court of Justice today ruled in favour of Marks & Spencer,
saying that it should be allowed to claim the VAT back.
The UK authorities had accepted that the High Street retailer had overpaid
VAT on the teacakes for a number of years, but argued that repaying the full
amount would ‘unjustly enrich’ Marks & Spencer as around 90% of the VAT cost
had been passed on to customers.
Marks & Spencer argued that the defence of unjust enrichment was applied
to its valid claim for wrongly paid tax but the same defence was not applied to
block comparable claims made by its competitors, contravening the European law
principles of equal treatment and fiscal neutrality.
The ‘Battle of the Teacake’ has been a tax epic, stretching over 12 years and
involving 2 visits to the ECJ. Tony McClenaghan, head of indirect tax at
Deloitte, which acted for M&S, described the ECJ decision as a ‘sweet
victory’.
‘Commonsense has prevailed. It is unreasonable for different retailers to be
treated differently in relation to similar transactions. The fact that the UK
authorities changed the law in 2005 suggested that comparable situations had
previously been treated differently,’ McClenaghan said.
Further reading:
M&S feasts on £3.5m teacake
windfall
The numbers you crunch tell a story. Your expertis...
16yEmbracing user-friendly AP systems can turn the tide, streamlining workflows, enhancing compliance, and opening doors to early payment discounts. Read...
View articleOrganisations can enhance their financial operations' efficiency, accuracy, and responsiveness by adopting platforms that offer them self-service cust...
View articleIn a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...
View resourceDiscover how AP dashboards can transform your business by enhancing efficiency and accuracy in tracking key metrics, as revealed by the latest insight...
View articleThe amount of tax saved by businesses through HMRC’s Patent Box scheme has increased by 23% over the last five years, from £1.14 billion in 2017/18 to...
View articleUK Chancellor Jeremy Hunt has hinted at the possibility of further tax cuts in the upcoming spring Budget, during his time at the World Economic Forum...
View articleThe legislation, which introduces a global minimum tax of at least 15% for multinational enterprises, aims to limit tax competition and ensure large c...
View articleThe upcoming tax changes in 2024 will significantly impact businesses and individuals in the UK. Accountants play a crucial role in helping clients na...
View articleAccountants must stay vigilant, adapt their tax strategies to evolving regulations, prioritize transparency, and foster collaboration with tax authori...
View articleAs the government prepares for re-election, PM Sunak promises to control spending in order to bring forth tax cuts next year Read More...
View articleThe Office for National Statistics revealed that the UK economy shrank by 0.3% in March after the economy grew by 0.1% in the previous three months Re...
View articleAs the Spring Budget approaches, dissenters of the UK government’s increasingly complex contractor legislation are baying for change. HMRC has already...
View article