- JPMorgan Chase Bank, NA (“CBNA”) is in a dispute with HMRC over the treatment of services supplied by CBNA to JPMorgan Securities plc (“SPLC”), a UK-incorporated entity and an indirect subsidiary of CBNA.
- The dispute concerns whether the services are taxable or exempt. The services are made up of Support Services and Business Delivery Services.
- Support Services are typically generic services which are not specific to a particular part of the business and include Human Resources, Real Estate and Legal.
- The taxpayer accepts such services are taxable. The taxpayer argued that it was making separate supplies of Business Delivery Services to each Market business, which were exempt supplies within Articles135(1)(d) and/or (f) of the VAT Directive.
- If there was an overall single supply (BDS and Support Services) this was a single supply is exempt on the basis that financial transactions by SPLC’s Markets business segment are themselves overwhelmingly exempt.
- The FTT provides a high-level overview of the functions within BDS, which include Quantitative Research, Technology, Operations, and Market Risk. Each Markets business receives a package of services which is bespoke to its needs.
- Since 2006, CBNA provides all services under a General Master Services Agreement (“GMSA”).
- It has been the subject of various amendments and a restatement in 2019 (the “2019 GMSA”).
- The FTT refers to an appendix D which is a specimen invoice which itemises services supplied which align with Business Delivery Services and Support Services.
Source KPMG
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