- The Supreme Court ruled that a success fee paid after a company leaves a VAT group is subject to VAT, even if the underlying services were performed while both parties were in the same VAT group.
- The “time of supply” for VAT purposes is when the fee becomes due and is invoiced, not when the services were originally provided.
- Section 43 VAT grouping rules do not override the ordinary time-of-supply rules.
- VAT grouping is not a self-contained code but operates within the broader VAT law framework.
- The decision highlights the need for businesses with group structures and contingent fees to review contracts and VAT practices when group membership changes.
Source: rpclegal.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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