Landmark victory sets VAT precedent

Link: Customs labelled second worst IT offender

The case involved Electronic Data Systems in relation to services provided in connection with an outsourced loan operation.

An original tribunal held services provided by EDS to Lloyds TSB and Lloyds TSB Insurance Services, qualified for exemption from VAT. The Court of Appeal has unanimously upheld the decision.

‘This is a landmark decision in the continuing legal debate over the correct VAT treatment of financial services outsourcing,’ said Peter Jenkins, Ernst & Young’s global head of indirect tax. ‘Customs may well now conclude that it is wholly unfruitful to seek to pursue this issue further in litigation.’

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