Deloitte Weekly VAT News - Week Ended 04.02.05

VAT avoidance - ECJ Opinion postponed

The ECJ's Advocate General has postponed the delivery of his opinion in the cases of Halifax and others, which was to have been discussed at our breakfast briefing on 25 February. The Halifax opinion should now be issued in April. We will be arranging a briefing at that time. The briefing arranged for 25 February will go ahead, but will focus on the treatment of share transactions and the Kretztechnik opinion, which is still scheduled to be delivered on 24 February.

VAT paid in error - further retrospective claims?

Some businesses that overpaid VAT more than 3 years ago may be able to make claims for repayment following the Tribunal's decision in the Marguerita Hoare School of Dancing case. The Tribunal found that the school had formed a view that Customs were wrong to collect VAT on its income before March 1997 (even though the event that crystallised this - a decision of the VAT Tribunal in another case - occurred after that date) and so that it was entitled to a refund, despite the introduction of the 3-year cap on such claims, in accordance with the guidance issued by Customs in their Business Brief 22/2002. Customs argument, that the school could not have known that the VAT had been paid in error until the Tribunal decided this, was rejected.

Company Cars - High Court confirms VAT recoverable

Businesses providing cars intended for business use only should have a better prospect of reclaiming the VAT on their purchase following the High Court's rejection of Customs' appeal in Elm Milk Ltd. The Company successfully argued that, in accordance with the Board resolution containing the relevant terms of employment, the car owned by the family business was intended for business use only and the VAT on it could be reclaimed. Customs' argument that the Tribunal's decision allowing VAT recovery was "perverse" given that "there was no bar to the car...

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