The HMRC team have successfully acted for an importer on a VAT issue in excess of £1million
The challenge contended that the payments from customers did not attract VAT as the payments were on account for future goods. Detailed evidence was collated with legal submissions. HMRC also accepted that following the guidance contained within commodities and terminal market (VAT Notice 701/9), section 2.1.2 and 3.3.1, it states that our client was under no obligation to buy from its supplier and therefore the premium is separate from the price of the goods and is a standard rated supply of services. However, under the Place of Supply of Services rules, as the agreement is with a company based outside of the UK, it falls under B2B services and is therefore where the supplier is based. As a result, no UK VAT is payable.
If the Assessment had been raised, our client could have faced insolvency.
Our client said ‘This was my happiest moment when you informed me of the successful challenge… I stand in respect for your achievement. You have given back to me my business and my life.’
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*This article is provided for general information purposes only and does not constitute legal or any other professional advice.