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Was a payment handling service exempt from VAT?

By Andrew Needham, April 2020

Summary

This was an appeal against a decision by HMRC to reject a voluntary disclosure by the appellant for nearly £19 million on what they considered to be overpaid VAT on payment handling services which the appellant considered to be exempt from VAT.  

Background

The First Tier Tribunal (FTT) considered a number of issues:

  • whether payment handling charges were exempt (under VATA 1994, Gp 5, Sch 9, items (1) and (5); 
  • whether the supply was separate from other media services;
  • which VAT group member made the supply;
  • whether there was an intra-group supply; and
  • whether there was an abuse of
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