The questions on the UK’s derogation on sales via non-registered agents have finally been published in the reference to the Court of Justice of the European Union (CJEU). The First-tier Tribunal (FTT) decision, which decided on the reference, was issued back in 2014. The FTT concluded that the UK’s derogation wrongly resulted in the infringement of various fundamental VAT principles and fails to achieve what it set out to do, agreeing with the taxpayer that the preferred route would be to amend the UK law to allow for relevant input tax to be taken into account. However, the FTT observed that the UK law accurately reflects the derogation and therefore it would need to be the CJEU that would need to declare the derogation invalid.
At the time of the FTT decision, HMRC confirmed that they would challenge any reference. However, they confirmed in Brief 19/14 that:
The questions have finally been published in the reference to the CJEU on the UK’s ‘party plan’ derogation. To access the questions click here (note that the numbering of the questions is not clear).
To access the earlier FTT click here. The FTT refers to this appeal being for £14 million excluding interest, an amount which will have grown since.
For further information please contact :