Issue:
4885
/
Categories:
Comment & Analysis
, anti-avoidance
, HMRC
, VAT
, VATA 1994
, Avoidance
, Land & property
To VAT or not to VAT?
Key points
- Mr Moulsdale lost his argument against HMRC all the way to the Supreme Court.
- The argument stemmed from the circularity in the definition in VATA 1994 Sch 10 para 12 of ‘exempt land’.
- The purpose behind the rules in paras 12 to 17 is to stop exempt businesses triggering a VATable supply to a connected person which then allows the exempt trader to recover significant input VAT.
- Taxpayers using anti-avoidance provisions against HMRC and arguing for a wide construction of the anti-avoidance rules are never going to gain much traction with the courts.
Anyone who advises on property and VAT knows that complexities and subtleties abound. But we also know that there are some axiomatic first principles and in my view two of those are that:
- a supply of land starts off generally as an exempt supply (there are exceptions for the sale of new...
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