- 2023 was a significant year for VAT in the UK, with important court decisions and legislative changes.
- The characterisation of a supply for VAT purposes was a popular issue, with the Court of Appeal recognizing the “principle of EU law” as the primary test.
- The Court of Appeal’s decision in Gray & Farrar upheld a hierarchy of tests for characterising a supply.
- The primary test involves determining the most important element from the perspective of the typical consumer.
- The second test is the principal/ancillary test, applicable when there is a clear principal element.
- The third test is a holistic assessment of the supply.
- The alignment of the Court of Appeal’s primary test with recent CJEU judgments is unclear.
- The deductibility of VAT in share deals was also discussed.
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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