In JPMorgan v HMRC, the First-tier Tribunal considered the VAT liability of outsourced services supplied between group companies. In dismissing the taxpayer’s appeal, the tribunal held that two types of services, one of trading infrastructure and another of general support services, were so closely linked that they constituted a single taxable supply. The tribunal focused heavily on the contractual framework that governed the provision of the services between the two group companies, and also gave a brief but intriguing analysis of the securities and payments exemptions. Businesses with intercompany agreements may wish to review the terms to make sure they reflect the economic reality of supplies and support the VAT treatment applied.
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In JPMorgan v HMRC, the First-tier Tribunal considered the VAT liability of outsourced services supplied between group companies. In dismissing the taxpayer’s appeal, the tribunal held that two types of services, one of trading infrastructure and another of general support services, were so closely linked that they constituted a single taxable supply. The tribunal focused heavily on the contractual framework that governed the provision of the services between the two group companies, and also gave a brief but intriguing analysis of the securities and payments exemptions. Businesses with intercompany agreements may wish to review the terms to make sure they reflect the economic reality of supplies and support the VAT treatment applied.
If you are not a subscriber, subscribe now to read this content.
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