VAT contract review

Tax lawyers are often asked to check over a commercial contract (ie a contract for the supply of services or goods, not a contract for the sale and purchase of a business or real estate) from a VAT perspective.

Understanding the VAT consequences of the contract

Although the contract that you are sent will usually already contain a VAT clause, it is not sufficient to look only at that clause. As further explained in Practice Note: How to review a commercial contract for VAT purposes, you should review the whole contract so you can establish:

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what is being supplied, ie the nature of the goods or services at the heart of the contract because this can affect whether VAT is chargeable and at what rate
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who is making the supply, looking not only at the parties to the contract but also whether another person or persons may be required or permitted to make or receive a supply under the contract and the capacity in which they are acting (ie whether as principal or as an agent or intermediary) (for which see respectively Practice Notes:

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Latest Tax News

Tax weekly highlights—21 November 2024

This week's edition of Tax weekly highlights includes: (1) the Supreme Court decision in Refinitiv concerning the interaction between the diverted profits tax and an advance pricing agreement, and (2) the Supreme Court decision in Cobalt Data Centre on the scope of the enterprise zone allowance.

UT finds FTT made errors when setting aside HMRC best judgment assessment (HMRC v Sintra Global)

Tax analysis: In Sintra Global, the Upper Tribunal (UT) set aside the decision of the First-tier Tax Tribunal (FTT) insofar as it related to a notice HMRC had issued to an individual making him liable for the payment of a civil evasion penalty charged against a company he was a director of. The UT found that the FTT had failed to follow the guidance provided by the Court of Appeal in Pegasus Birds in relation to the assessment the penalty was based on.

Supreme Court rules on the scope and limitations of the enterprise zone tax incentive (R (oao Cobalt Data Centre) v HMRC)

The Supreme Court unanimously dismissed the taxpayers’ argument that the relevant expenditure fell within section 298(1) of the Capital Allowances Act 2001 (CAA 2001) and concluded that, based on the proper interpretation of that provision, the expenditure was not incurred under a contract executed prior to the conclusion of the initial ten-year period, as required. Adam Craggs, partner at RPC, discusses the implications that the judgment has on taxpayers going forward.

Consultation on expanding tax conditionality to new sectors

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