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As we reported to you early evening on Budget Day, the VAT news within the 2016 Budget was heavily targeted on tackling VAT evasion and avoidance. 

Please click here for the link to our Budget news article.

Other than the Budget, VAT had a fairly quiet month news wise. Our summary of the rest of the VAT news for March is outlined below.

European Commission news
The European Commission has commissioned a study and survey on the development of a new EU VAT web portal. This new web portal would provide a single access point for consulting VAT rules and procedures that apply in and across the different EU Member States.

The European Commission proposes to develop the new web portal in three stages. The first stage has already been launched with the Mini One Stop Shop ('MOSS') and this is currently being updated and improved. Once this stage is complete, it is the European Commission's intention to extend this new web portal by adding new topics and, in time, creating a 'modular' system to provide a comprehensive EU wide VAT portal.

The survey provides potential users of the new VAT web portal with an opportunity to express their views on the relevance of including various VAT related topics on the new web portal, together with seeking their input on the practicalities regarding the usage of such a new web portal.

Case law
In a Court of Appeal decision involving BPP holdings Ltd, an order barring HMRC from taking any further part in this test case concerning connected supplies of printed matter and education services and whether amendments to VAT legislation in 2011 precluded zero-rating for the former.

The First-tier Tribunal ('FtT') concluded that barring HMRC from further participation was the appropriate sanction, however, the Upper Tribunal ('UT') decided that that the FtT had made an error of law and that HMRC should not be barred.

The Court of Appeal ruled that the FtT did not make an error of law and that the UT should not have intervened. Consequently, the Court of Appeal agreed with the FtT and held it was appropriate that compliance with the Tribunals rules and directions was given correctly by the FtT. This case demonstrates the importance of complying with Tribunals rules, directions, orders and time limits.

In a ECJ case, the Advocate General delivered its opinion in a referral from Portugal (C-516/14 Barlis 06 - Investimentos Imobiliários e Turísticos SA) asking whether a specific description on an invoice as to the extent of legal services rendered complies with EU VAT legislation requirements for a valid VAT invoice.

The Advocate General held that a description such as 'legal services' would usually be sufficient. However, text stating 'legal services supplied to 31 March 2016' would not satisfy the requirements under EU VAT legislation where there is continuous supplies of services as, according to the Advocate General, this should state both the start and end date of the billing period.

If the ECJ agrees with the Advocate General's opinion, there is a risk businesses and organisations, as customers, may be denied VAT recovery where invoices do not fully satisfy these requirements and, as suppliers, will have to consider systems and process changes to meet the requirements. We shall update you again as soon as the ECJ decides on this case.

In a tribunal case involving Gardon Construction Ltd it was determined that the appellant was not entitled to input tax (VAT) recovery as the supplier's invoices did not meet the requirements of a valid VAT invoice and there was insufficient alternative evidence that the supplies took place as indicated in the invoices.

As previously mentioned in our November 2015 update, it is important that all businesses and organisations hold proper VAT invoices to support their claims, including fuel receipts for VAT on business mileage claims.

Where a business receives a non-compliant invoice, it should regularise the position without delay, in particular if the business has operations in other overseas jurisdictions since attempts to rectify the position post Tax Authority audit may be ineffective, resulting in disallowed input tax (VAT) and creating an unnecessary financial exposure (i.e. Petroma Transports SA, case C-271/12).

HMRC material
HMRC has issued a policy paper in relation to its measure enabling the future application of the VAT zero-rate on supplies of women's sanitary products that are currently subject to VAT at the reduced rate of 5%. This paper can be accessed here.

The VAT road fuel scale charges were amended with effect from 1 May 2016 and can be accessed here. Businesses and organisations must use the new scale charges from the start of the next prescribed accounting period beginning on or after 1 May 2016.

Contact us

Should you wish further information on the above, please do not hesitate to contact Gary using the details outlined below.


Gary Moore
Direct line 0141 636 9353
Mobile 07812 061 582
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