HMRC v Loyalty Management Ltd

In HMRC v Loyalty Management Ltd (ECJ Case C-53/09) a company (L) operated a sales promotion scheme intended to reward regular customers. Under the scheme customers who purchased goods from certain retailers received ‘loyalty points’ which they could use to acquire further goods or services from other specified suppliers. L paid the suppliers for these goods or services and reclaimed input tax. Customs rejected the claim on the basis that the goods and services had been supplied to the individual customers rather than L. The CA unanimously allowed L's appeal but the HL referred the case to the ECJ.

The ECJ held that ‘payments made by the operator of the scheme concerned to redeemers who supply loyalty rewards to customers’ must be regarded ‘as being the consideration paid by a third party for a supply of goods to those customers or ...