Aimia: VAT on tripartite arrangements

The Supreme Court, by a majority of 3:2, has allowed Aimia, the operator of the well known Nectar cards scheme, to recover the VAT paid to its suppliers, who provide rewards to Nectar point collectors. Aimia paid the suppliers, who provided goods and services to the collectors; therefore, HMRC argued that this payment did not relate to supplies made to Aimia. The majority of the court held that the suppliers should be treated as making both a supply to the collectors and to Aimia and that this was consistent with the principles set out in the Redrow line of cases.