Weekly VAT News

Chris Poulton: Application to strike out appeal on application of EU law – FTT

The FTT has refused HMRC’s application to strike out an appeal concerning the post-Brexit application of EU law. On 7 January 2023, Mr Poulton submitted a VAT refund claim under the DIY housebuilders scheme, the majority of which was refunded. On 3 June 2023, Mr Poulton wrote to HMRC enquiring how he could reclaim VAT on certain additional invoices where it had been incorrectly charged (the services should have been zero-rated), as he was unable to reclaim the VAT from the supplier, which had gone into liquidation. HMRC treated this letter as a further claim for a VAT refund under the DIY refund scheme, which it refused. Mr Poulton appealed that decision, and HMRC applied to strike out the appeal. HMRC consider that following Brexit there is no basis for making a Reemtsma claim (a claim for incorrectly paid VAT made directly to HMRC where it is impossible or excessively difficult to recover it from the supplier), and that, accordingly, the FTT did not have jurisdiction to hear the appeal. However, the FTT was not satisfied that the parties had had an adequate opportunity to address the application of section 28 of the Finance Act 2024, concerning whether the ability to make Reemtsma claims had been preserved for post-Brexit periods by related legislation, and decided that this point should be left to the substantive hearing. The FTT considered Mr Poulton had a realistic prospect of succeeding in that argument, so refused to strike out the claim. HMRC also argued that, if Reemtsma claims have survived Brexit, Mr Poulton had no reasonable prospect of success for a claim made under section 35 or section 80 of the VAT Act 1994. The FTT found that Mr Poulton did not have any right to repayment from HMRC under section 80, which deals with claims for repayment of overstated or overpaid VAT. However, if it were possible to adopt a conforming (Marleasing) construction to extend Reemtsma claims in respect of VAT incorrectly levied by a contractor to a DIY builder, he had a realistic prospect of succeeding in an argument that a claim would be available under section 35, which governs the DIY refund scheme. Accordingly, Mr Poulton’s appeal will proceed to a hearing on the substantive issues. (Contact: Oliver Jarratt)

Alcohol duty online service

The new alcoholic products producer approval (APPA) system has applied from 1 February 2025. New producers of alcoholic products can now apply for APPA online. Alcoholic products producers approved under previous alcohol production registrations and licenses were to be migrated to APPA during February. Any who have not received a letter by 25 February 2025 can email nru.alcohol@hmrc.gov.uk, with their business name, registered business address and Unique Tax Reference. On 1 March 2025, the Manage your Alcohol Duty online service was launched, which allows approved alcoholic products producers to submit monthly returns and payments online. The intention is to simplify alcohol duty administration, as producers can report and pay duty on all types of alcoholic products on one monthly return. The first return under the new system is due by 15 March 2025, for products released in February 2025. (Contact: Eleanor Caine)

Windsor Framework — Trader Goods Profile

HMRC have launched a ’public beta’ for the Trader Goods Profile (TGP) to help traders prepare for the new arrangements being introduced for moving goods from Great Britain to Northern Ireland under the Windsor Framework. The TGP is an online service available to businesses authorised under the UK Internal Market Scheme (UKIMS), which records information about goods moved from GB to NI. The information stored in the TGP can be used to auto-populate the Internal Market Movement Information (IMMI) data fields on the Trader Support Service portal and the software used to manage GB-NI movements. HMRC have said that joining the public beta will allow businesses to access their TGP and ensure it contains accurate information about goods moved from GB to NI, which will allow them to use their TGP as soon as the new arrangements come into effect. (Contact: Donna Hemphill)

VAT case calendar

On 4 or 5 March, the Court of Appeal will hear the taxpayer’s appeal against the Upper Tribunal decision in WTGIL Limited on VAT on ‘black box’ insurance. On 10 March, the Upper Tribunal will hear the taxpayer’s appeal against the First-tier Tribunal decision in JPMorgan Chase Bank, NA on single versus multiple supplies. On 11 or 12 March, the Court of Appeal will hear HMRC’s appeal against the Upper Tribunal decision in Innovative Bites Limited on the VAT treatment of giant marshmallows.

At the CJEU, on 6 March, there will be Advocate General opinions released in Högkullen on the valuation of intra-group charges and in Palmstråle on VAT on the reimportation of horses.

Dbriefs webcast

On Tuesday 4 March at 12.00, the UK Tax Update – March webcast will be hosted by Tim Waterhouse. Our panel will discuss the latest UK tax developments, with updates on news in corporate, employment and indirect tax.