Upper Tribunal Upholds HMRC Rejection of Barclays Cross-Border VAT Grouping

• The Upper Tribunal dismissed Barclays Service Corporation’s appeal against HMRC’s refusal to let it join a UK VAT group.
• It held BSC did not have a fixed establishment in the UK in December 2017 because the UK branch lacked sufficient control over employees or technical resources to contribute meaningfully to BSC’s business.
• The Tribunal also said HMRC could reasonably refuse the application for “protection of the revenue” due to avoidance/abuse risk, given the large expected VAT savings and a one-off £21m tax benefit.
• It rejected HMRC’s argument that UK VAT grouping should be read consistently with EU law to exclude fixed establishments, saying that interpretation would conflict with the legislation’s purpose and structure.

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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