BARCLAYS v HMRC – SUCCESS FOR HMRC IN VAT GROUPING DISPUTE

HMRC has improved its success at first instance with its recent UT win in this important case in relation to VAT grouping and fixed establishment.

Upholding the decision of the FtT, the UT decided that a UK Branch of a US company did not have sufficient human and technical resources in the UK for a fixed establishment on the date it submitted its VAT grouping application. It was therefore ineligible to join the Barclays UK VAT group.

The UT also held that the FtT had reached the wrong conclusion in relation to HMRC’s “protection of the revenue” powers.  The FtT should have concluded that HMRC could reasonably have decided to refuse Barclays’ VAT grouping application under that provision.

The UT agreed with the FtT that the UK VAT grouping regime could not be interpreted consistently with EU law following Danske Bank.

Hui Ling McCarthy KC, Michael Ripley and Edward Waldegrave acted for HMRC.

A copy of the UT’s decision can be found here.