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HMRC to end VAT cost-sharing groups in finance sector.
HMRC has signalled the end of VAT cost-sharing groups in the financial services sector in VAT Information Sheet 02/18: impact on existing cost share groups following changes to HMRC’s policy and Revenue and Customs Brief 3 (2018): changes to the VAT exemption for cost sharing groups.
The guidance considers the Court of Justice of the EU’s decisions in several cases including DNB Banka AS (Case C-326/15). These decided that the cost-sharing exemption applied only to activities covered by Art 132(1) of the Principal VAT Directive not those falling under Art 135 such as insurance and finance. HMRC believes that the exemption applies only ‘to services which a group supplies to its members within the same member state’.
From 22 March the exemption is restricted to members and cost-sharing groups in the UK and is not allowed when an uplift has been charged on transactions for any...
