In Dixons Retail PLC v HMRC (C-494/12 – 21 November 2013) Dixons was appealing against HMRC’s refusal to reimburse output VAT charged by Dixons on electrical goods supplied to customers – and paid by Dixons to HMRC. The basis for Dixons’ claim for reimbursement was that the customers had paid for the goods with credit cards ‘used in a fraudulent manner’.
Under the agreement between Dixons and the card companies Dixons was obliged to accept payment by card and the companies undertook to pay the price after deduction of a charge. Although the agreements gave the card companies recourse against Dixons in the case of fraudulent use of cards they did not exercise this right.
The appeal raised two issues: had Dixons made a taxable supply and if so what was the consideration. The court noted that whether a supply had taken place was an objective...
