Hastings: when does a fixed establishment exist?

In a long awaited decision, in Hastings Insurance Services Ltd v HMRC, the First-tier Tribunal has provided further important guidance on the relevant test for determining when a fixed establishment (FE) exists for VAT purposes in the context of two related companies working together to provide services to clients. In doing so the tribunal reviewed relevant CJEU case law, including Welmory, as well as exploring the key factual elements of the case, to lead to the conclusion that there was no fixed establishment. The fact that the entities operated independently and on an arm’s length basis, that they had other clients and that VAT planning was seemingly not a factor in setting up the structure, made it difficult for HMRC to claim that there was the requisite level of control in order to create a FE.