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Inventive Tax Strategies (in liquidation) and others v HMRC

In Inventive Tax Strategies (in liquidation) and others v HMRC [2019] UKUT 221 (22 July 2019) the UT found that the issue of a credit note by a supplier was not a reduction in consideration giving rise to a right to recover output tax. 

The appellants were four companies which were either in administration or in liquidation. Before becoming insolvent they had sold tax avoidance schemes in particular in respect of SDLT mainly to individuals. All the schemes had failed and the looming obligation to repay all the fees charged to customers had caused the appellants’ insolvency. At the directions of their administrators/liquidators they had issued credit notes representing the fees due back to their clients but no amounts had actually been repaid. The issue was whether there had been a decrease in consideration for the purpose of the Value Added Tax Regulations SI 1995/2518...

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