Which comes first? This is the question that faced the Upper Tribunal in respect of the time of supply and VAT grouping rules in Prudential Assurance Company.
Silverfleet Capital Ltd (SCL) had supplied investment management services to The Prudential Assurance Company Ltd (Prudential) while the two companies were members of the same VAT group of which Prudential was the representative member. Prudential had agreed to pay a management fee and a performance fee if certain benchmarks had been met. SCL then left the VAT group following a management buy-out and the parties agreed that only the performance fee would remain payable if the relevant conditions were met. This happened around 7 years later and SCL invoiced Prudential a total of around £9 million plus VAT at the standard rate of 20%.
Source European Tax Blog
