Weekly VAT News

Clearwater Hampers Limited: VAT and hampers – FTT

Clearwater Hampers Limited appealed against HMRC’s decision to refuse a claim for the repayment of output tax on supplies of food and drink gift hampers which came packaged in a lidded wicker basket. Clearwater Hampers considered that the lidded baskets in which food and drink were packaged did not constitute separate standard-rated supplies, as HMRC contended, but rather should share the same VAT treatment as the food and drink. The food and drink in the lidded baskets included standard-rated and zero-rated items, and Clearwater Hampers applied a composite VAT rate, based on the relative values of the food and drink items. The First-tier Tribunal has agreed with Clearwater Hampers. The FTT considered that the average purchaser would not consider the lidded baskets to be an aim in themselves. The lidded baskets presented and protected the food and drink, and were a means of better enjoying them as the gift that the purchaser intended to give. Accordingly, the supply of the lidded basket was ancillary to the food and drink, and shared their VAT treatment. The composite VAT rate should be determined from the relative values of the standard-rated and zero-rated food and drink items. The FTT allowed Clearwater Hampers’ appeal. (Contact: Andrew Roberts)

VAT appeals – HMRC update

HMRC have updated their list of VAT appeals, setting out the status of HMRC appeals and recent cases which they consider have potential implications for other taxpayers. The update includes the information that HMRC will not be seeking permission to appeal the Upper Tribunal decision Mark Glenn Ltd on the zero-rating of a hair replacement system and the First-tier Tribunal decision in Story Terrace Limited on whether there was a supply of books or ghost writing services. HMRC were refused permission to appeal the First-tier Tribunal decision Global by Nature Limited on whether products were sports drinks. The Upper Tribunal will hear HMRC’s appeal against the FTT decision Align Technology Switzerland GmbH & Anor on VAT and aligners in the first week of May 2026. (Contact: Andrew Clarke)

TellusTax Advisory: Input tax deduction in cross-border supply chains – Deloitte article

Our latest Deloitte Insights article, TellusTax Advisory (T-96/26) – Input tax deduction in cross-border supply chains, discusses a recent referral to the Court of Justice of the European Union from Sweden regarding the VAT recovery position relating to the provision of cross-border services. The question referred addresses whether the taxpayer has the right to deduct input tax in the context of a mismatch by two EU member states in the implementation of the fund management VAT exemption. The article discusses the background to the referral, the question referred, and the potential implications.

This week’s CJEU VAT case calendar

On 22 April, there will be a judgment in Mokoryte on bad debt relief following the assignment of a claim for an outstanding debt. On 22 April, the Advocate General will also deliver an opinion in Sampension Livsforsikring on the Danish VAT grouping rules.

Dbriefs webcast

On Wednesday, 22 April at 12.00, the UK Tax Update – April webcast will cover the latest UK tax developments, with updates on news in corporate, employment, international, and indirect taxes.