Victory looms for HMRC in Halifax case

HMRC logo

HM Revenue and Customs is expected to triumph in a case involving Halifax
Bank, allowing the taxman to prevent banks reclaiming as much as £1bn in VAT in
the future.

Tomorrow, the European Court of Justice is expected to rule that a scheme set
up by Halifax, in the construction of a call centre, should not allow the bank
to reclaim £7m in VAT bills, the Financial Mail reported.

VAT rules on banks allow them to reclaim only a small proportion of the VAT
on building work, but Halifax set up a separate company to act as a middleman in
the building of the call centre. As a construction services business it could
then reclaim much more VAT.

Last April, the European Advocate General gave an initial opinion ruling
against Halifax.

Related reading

Life Belt with Computer Folders