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Landlinx, VAT and call options: HMRC’s famous public disaster

Speed read
1985 saw the launch of ultimately-successful infraction proceedings against the UK government in what became EC Commission v UK. The case of Landlinx Estates Ltd suggests that HMRC is still scarred by that experience and will take dramatic steps to ensure no repeat, even if that means upending a decades-long consensus with taxpayers. In that case, the tribunal dismissed HMRC’s new argument that the VAT exemption for land transactions does not apply to the grant or surrender of an option over land. But it is a different launch from 1985 from which HMRC should learn more pressing lessons: not to sacrifice established customer expectation by tilting at windmills; and how to recover goodwill if you do.

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