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Paymex Ltd v HMRC

In Paymex Ltd v HMRC (TC01210 – 10 June) a company (B) made supplies in connection with the establishment and supervision of individual voluntary arrangements for consumers who had fallen into financial difficulties.

HMRC issued a ruling that the company (P) which was the representative member of B’s VAT group was required to account for VAT on its supplies.

P appealed contending that it was making supplies of financial services concerned with debts which qualified for exemption under Article 135(1)(d) of EC Directive 2006/112/EC.

The First-tier Tribunal accepted this contention and allowed the appeal.

Judge Berner held that B’s services were ‘related to a financial transaction which has as its purpose both a change in the legal and financial situation of the debtor and creditors and the alteration and/or extinguishment of their respective rights...

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