Deloittes wins VAT ruling

Deloittes wins VAT ruling

An attempt by Customs & Excise to force overseas companies to pay VAT when they have related businesses in the UK has collapsed, following a landmark ruling in the High Court.

Customs, which had already been thwarted by a VAT tribunal last year, wanted a Hong Kong-based satellite TV broadcaster to pay VAT because it used production facilities provided by a related company in London.

The department confirmed last week it had decided not to appeal against the High Court judgment, but was concerned companies would set VAT avoidance schemes using current or newly set-up overseas subsidiaries.

Customs argued the production company in London created a branch or agency for the Hong Kong broadcaster, Chinese Channel, and should be liable to pay UK VAT.

But Deloitte & Touche, the company’s accountants, countered that it enjoyed a VAT-free regime in Hong Kong, where it provided its services, and this should apply to the related company in London.

John Kennedy, a Deloitte & Touche VAT partner, said there could be a significant number of companies that could be collecting VAT in good faith when they do not need to.

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In 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 resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource