VAT Groups in the UK: Prudential Case Highlights Implications for Members – Court of Appeal Decision

• Court of Appeal released judgment in Prudential on 26 March 2024 regarding VAT groups
• Commercial activities among members of same VAT group can result in VAT being chargeable if payment is made after leaving group
• Importance of understanding implications of VAT group membership changes, especially in group reorganization or M&A activity
• Businesses in financial services sector and sectors unable to recover VAT in full will be interested in this case
• Court of Appeal explored limits of VAT group principle in Prudential case
• Case involved investment management services provided by Silverfleet to Prudential, with VAT issue arising after Silverfleet left VAT group
• HMRC contended VAT was chargeable on performance fee after Silverfleet left group, while Prudential argued no VAT was due
• Majority of Court of Appeal sided with HMRC, emphasizing time of supply rules as decisive
• Judgment highlights impact of time of supply rules on timing and nature of supply within VAT groups

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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