Supreme Court Rules VAT Due on Services Invoiced After Leaving VAT Group – Prudential Case

• The Supreme Court dismissed the taxpayer’s appeal in the case of The Prudential Assurance Company Ltd v HMRC.
• The case involved whether VAT was due on invoices raised after a company left a VAT group for services performed while in the group.
• Silverfleet provided investment fund management services to Prudential while both were in the same VAT group.
• The services were initially disregarded for VAT purposes under section 43 of VATA.
• A success fee became due after Silverfleet left the VAT group, raising the question of VAT applicability.
• The Supreme Court ruled that VAT was applicable to the success fee invoices issued after leaving the group.
• The decision was based on the time of supply rules in VATA 1994, section 6, and regulation 90.
• Regulation 90 treats services supplied over a period as occurring separately when invoices are issued or payment is received.
• The court concluded that the success fees were subject to VAT as they were invoiced after the companies were no longer in the same VAT group.

Source: claritaxnews.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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