UPPER TRIBUNAL CONFIRMS APPLICATION OF ‘FISCAL NEUTRALITY’ PRINCIPLE

The Upper Tribunal has confirmed the application of the EU law ‘fiscal neutrality’ principle to claims for the recovery of overpaid VAT in relation to gaming machines and fixed odds betting terminals.  In dismissing HMRC’s appeal against the decision of the FTT, the UT has provided a useful reminder that the EU law requirement of “equal treatment” of similar goods and services is a strong principle.  The case also helpfully reiterates that this similarity must be judged from an analysis of the characteristics of the goods/services and the perception of the average customer.  The UK Government failed over many years to respect these requirements in the gambling sector and are now being picked up on it by the Courts.

Jonathan Peacock QC and Valentina Sloane QC acted for the taxpayers.

The decision can be found here.