1560Finance and Accountancy Briefings

Finance and Accountancy Briefing

< back to search results

VAT briefing: Upper Tier Tribunal overturns ruling

Overview

The Upper Tier Tribunal (UTT) has resoundingly overturned the Lower Tier Tribunal's (LTT) decision in the Med Hotels case, finding that Med was not obliged to pay VAT under the Tour Operators’ Margin Scheme (TOMS).

HM Revenue & Customs (HMRC) argued that the circumstances of Med’s business were such that it should be treated as a principal and that VAT was payable on its gross margin as required by TOMS. The LTT had accepted this contention and concluded that the contracts did not indicate that Med was an agent and that its “behaviour” was not that of an agent.

It was reported that the LTT’s decision would cost Med some £7 million.

The UTT, however, has taken a very different view and approached the case in a wholly different way. In doing so, it was made clear that the UTT disapproved of the way in which the LTT decided the case. For the UTT, the contracts agreed by the parties were all-important.

For a look at the full briefing, please download it now.

Tags: Legal, VAT.

Related categories