- The Supreme Court has dismissed the appeal of Target Group Limited against the Court of Appeal’s decision regarding VAT exemption for loan administration services.
- The Supreme Court interpreted the payment VAT exemption narrowly, stating that functional participation and performance in the actual execution of the transfer or payment is necessary for the exemption to apply.
- Target was found to be merely giving instructions and not involved in the actual execution of the payments.
- The decision has implications for all UK businesses in the payment sector.
- Businesses in the payment sector should review their arrangements and assess if they meet the criteria set out in the Supreme Court’s decision.
- It is advisable for businesses to ensure clear contractual articulation of payment execution and liability in relation to the underlying payments.
Source: insightplus.bakermckenzie.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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