One minute with Karen Killington, Head of the Indirect Tax Knowledge Management Team at KPMG.
What’s keeping you busy at work?
In my role, we are somewhat at the mercy of HMRC and court timetables – the release of a key case or policy change will trigger the need for some immediate analysis. Sadly, this often seems to be at 4pm on a Friday. We currently have a raft of Supreme Court VAT decisions, one on supplies in VAT groups (Prudential [2025] UKSC 34, released on 11 September) and two more expected imminently – on VAT recovery on deal fees (Hotel la Tour) and hospital parking (Northumbria Healthcare NHS Foundation Trust). To have three so close together is very unusual. Also, there is a lot of TOMS discussion at present following on from the various cases on its scope like Bolt and Sonder.
What do you know now that you wish you’d known at the start of your career?
To not be afraid to speak up and get your views heard. And not to take it personally when someone disagrees with you!
What’s topical in your world?
Gosh, where to start. I suppose AI is big news at present; it is a good servant but it is vital that what it generates is evaluated critically and fact-checked before use. The recovery of VAT on DB pension scheme investment costs is also big at present on the back of the recent Revenue & Customs Briefing (4/2025), which I have to say could have been clearer.
The thing with VAT is that you think you have it sorted, and then a case can drive a coach and horses through your cherished beliefs. But generally when I have thought that something really does not sound right, the more logical position has eventually prevailed when the matter got to a higher court.
The Government hasn’t ruled out speculation over changing VAT thresholds or narrowing exemptions in the upcoming Budget. Politics aside, are there any changes here the Government should enact?
The VAT food law is badly in need of an overhaul. Far too much tribunal time is being spent on debating semantics like what ‘made from potato’ or ‘chocolate covered’ means. And don’t get me started on the meaning of confectionery and the whole ‘when is a flapjack too fancy to be zero rated’ debate.
Personally, I would be wary of narrowing exemptions; in the B2B sector, it can actually lead to more VAT recovery (so less revenue for HMRC) and increasing the costs of things like investments, healthcare and insurance for supplies to consumers seems short-sighted in this current environment. While slashing the registration threshold would be hugely burdensome for HMRC and small businesses alike.
Has a recent case caught your eye?
I liked United Carpets [2025] UKFTT 895 (TC) about the self-employed carpet fitters, because it showed that VAT savings can be achieved with proper implementation and robust contracts that reflect economic reality – which is as it should be.
The recent first Soft Drinks Industry Levy case (Millennium Cash & Carry Ltd v HMRC [2025] UKFTT 865 (TC)) was also interesting in that it showed that the intention of Parliament is not an all-purpose get out of jail free card for HMRC when there has been a mistake in the wording of the law. To quote the judge in Wetherspoons [2009] EWCA Civ 1083, ‘there is only a certain amount of violence that can be done to the language which was actually used’
You might not know this about me but...
I love puns and clever word play sketches, like those one in The Two Ronnies, the songs of Tom Lehrer and cryptic crosswords. English is amazing – where else could the word ‘sanction’ mean both penalty and permission depending on context? Tax is a serious subject, but I firmly believe humour has its place within it, especially in articles – mine always have a theme!
One minute with Karen Killington, Head of the Indirect Tax Knowledge Management Team at KPMG.
What’s keeping you busy at work?
In my role, we are somewhat at the mercy of HMRC and court timetables – the release of a key case or policy change will trigger the need for some immediate analysis. Sadly, this often seems to be at 4pm on a Friday. We currently have a raft of Supreme Court VAT decisions, one on supplies in VAT groups (Prudential [2025] UKSC 34, released on 11 September) and two more expected imminently – on VAT recovery on deal fees (Hotel la Tour) and hospital parking (Northumbria Healthcare NHS Foundation Trust). To have three so close together is very unusual. Also, there is a lot of TOMS discussion at present following on from the various cases on its scope like Bolt and Sonder.
What do you know now that you wish you’d known at the start of your career?
To not be afraid to speak up and get your views heard. And not to take it personally when someone disagrees with you!
What’s topical in your world?
Gosh, where to start. I suppose AI is big news at present; it is a good servant but it is vital that what it generates is evaluated critically and fact-checked before use. The recovery of VAT on DB pension scheme investment costs is also big at present on the back of the recent Revenue & Customs Briefing (4/2025), which I have to say could have been clearer.
The thing with VAT is that you think you have it sorted, and then a case can drive a coach and horses through your cherished beliefs. But generally when I have thought that something really does not sound right, the more logical position has eventually prevailed when the matter got to a higher court.
The Government hasn’t ruled out speculation over changing VAT thresholds or narrowing exemptions in the upcoming Budget. Politics aside, are there any changes here the Government should enact?
The VAT food law is badly in need of an overhaul. Far too much tribunal time is being spent on debating semantics like what ‘made from potato’ or ‘chocolate covered’ means. And don’t get me started on the meaning of confectionery and the whole ‘when is a flapjack too fancy to be zero rated’ debate.
Personally, I would be wary of narrowing exemptions; in the B2B sector, it can actually lead to more VAT recovery (so less revenue for HMRC) and increasing the costs of things like investments, healthcare and insurance for supplies to consumers seems short-sighted in this current environment. While slashing the registration threshold would be hugely burdensome for HMRC and small businesses alike.
Has a recent case caught your eye?
I liked United Carpets [2025] UKFTT 895 (TC) about the self-employed carpet fitters, because it showed that VAT savings can be achieved with proper implementation and robust contracts that reflect economic reality – which is as it should be.
The recent first Soft Drinks Industry Levy case (Millennium Cash & Carry Ltd v HMRC [2025] UKFTT 865 (TC)) was also interesting in that it showed that the intention of Parliament is not an all-purpose get out of jail free card for HMRC when there has been a mistake in the wording of the law. To quote the judge in Wetherspoons [2009] EWCA Civ 1083, ‘there is only a certain amount of violence that can be done to the language which was actually used’
You might not know this about me but...
I love puns and clever word play sketches, like those one in The Two Ronnies, the songs of Tom Lehrer and cryptic crosswords. English is amazing – where else could the word ‘sanction’ mean both penalty and permission depending on context? Tax is a serious subject, but I firmly believe humour has its place within it, especially in articles – mine always have a theme!
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