HMRC has issued Revenue & Customs Brief 35/2014: Lok'nStore Group plc decision on calculating deductible VAT, which states that HMRC is not appealing the Upper Tribunal decision in favour of Lok’nStore Group plc’s partial exemption special method for apportioning residual input VAT o
HMRC has issued Revenue & Customs Brief 35/2014: Lok'nStore Group plc decision on calculating deductible VAT, which states that HMRC is not appealing the Upper Tribunal decision in favour of Lok’nStore Group plc’s partial exemption special method for apportioning residual input VAT on overheads. However, HMRC regards the Tribunal’s decision in relation to the ‘cost component’ test as specific to the facts of the particular case, and has not changed its existing policy that special methods based on floor space are not usually appropriate for the retail sector.
HMRC has also issued Revenue & Customs Brief 36/2014: VAT – liability of snowballs, which says HMRC is changing its policy on the VAT treatment of marshmallow and chocolate ‘snowballs’, following the First-tier Tribunal decision in Lees of Scotland Ltd and Thomas Tunnock Ltd that this type of confectionery possesses sufficient characteristics of a cake to be zero-rated.
Additionally, HMRC has recently issued Revenue & Customs Brief 37/2014: VAT grouping rules. The brief outlines HMRC’s position following the CJEU judgment in Skandia, stating that HMRC is considering what impact, if any, the CJEU judgment has on the UK VAT grouping rules and will provide an update in due course. The case concerned services supplied from a main establishment in the US to its branch in Sweden, for which the court held the Swedish group was liable to VAT. The judgment did not consider the UK VAT grouping rules specifically, which differ from the Swedish rules.
HMRC has issued Revenue & Customs Brief 35/2014: Lok'nStore Group plc decision on calculating deductible VAT, which states that HMRC is not appealing the Upper Tribunal decision in favour of Lok’nStore Group plc’s partial exemption special method for apportioning residual input VAT o
HMRC has issued Revenue & Customs Brief 35/2014: Lok'nStore Group plc decision on calculating deductible VAT, which states that HMRC is not appealing the Upper Tribunal decision in favour of Lok’nStore Group plc’s partial exemption special method for apportioning residual input VAT on overheads. However, HMRC regards the Tribunal’s decision in relation to the ‘cost component’ test as specific to the facts of the particular case, and has not changed its existing policy that special methods based on floor space are not usually appropriate for the retail sector.
HMRC has also issued Revenue & Customs Brief 36/2014: VAT – liability of snowballs, which says HMRC is changing its policy on the VAT treatment of marshmallow and chocolate ‘snowballs’, following the First-tier Tribunal decision in Lees of Scotland Ltd and Thomas Tunnock Ltd that this type of confectionery possesses sufficient characteristics of a cake to be zero-rated.
Additionally, HMRC has recently issued Revenue & Customs Brief 37/2014: VAT grouping rules. The brief outlines HMRC’s position following the CJEU judgment in Skandia, stating that HMRC is considering what impact, if any, the CJEU judgment has on the UK VAT grouping rules and will provide an update in due course. The case concerned services supplied from a main establishment in the US to its branch in Sweden, for which the court held the Swedish group was liable to VAT. The judgment did not consider the UK VAT grouping rules specifically, which differ from the Swedish rules.
