Retailers – credit card handling fees not subject to VAT?

Businesses that charge separate card handling fees to customers may be able to reclaim tax paid, following the High Court decision in Bookit Limited. The case, taken by Deloitte, involved card handling fees charged by a booking centre to cinema-goers who purchased their tickets over the telephone or over the internet. Customs argued that VAT was due on the fee but the High Court disagreed and decided that the charge was not subject to VAT.

Teacakes case goes back to the ECJ

The House of Lords has asked the ECJ to consider whether Customs can use the "unjust enrichment" argument to deny repayment of VAT that they accept has been overpaid by Marks & Spencer. M&S contends that the ‘unjust enrichment’ defence used by Customs to refuse repayment of VAT that M&S overpaid on teacakes over several years is discriminatory as it does not apply to taxpayers who are due refunds of VAT at the end of their VAT period but does apply to businesses like M&S, who pay over VAT to HMRC at the end of their VAT period. This is a Deloitte case.

VAT avoidance – more information from Customs

Customs have announced that they now accept that the existence of a standard confidentially clause (in an engagement letter, for example) will not in itself trigger a requirement to disclose arrangements. Their business brief also provides more detail on the two new listed schemes and the new hallmark of avoidance that were announced in the Budget.

Retailers – Customs pursue users of "merchant charges" planning?

We hear that retailers who have implemented the "merchant charges" planning are coming under renewed scrutiny following the Court of Appeal decision in Debenhams. Retailers who have this planning in place may now wish to consider their options.

Businesses with operations in Hungary

Businesses with operations in Hungary should consider claiming refunds of HIPA, following the news that an ECJ referral has made in the case of Lakep. The case will look at whether or not HIPA, a local business tax in Hungary, is "similar in nature to VAT" and therefore prohibited under EU law. A growing number of businesses have already submitted claims for overpaid HIPA, including Hungary’s largest bank.

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