Commissioners of Customs and Excise v Electronic Data Systems Ltd. [2003] EWCA Civ. 492 (11 April 2003)

Commissioners of Customs and Excise v Electronic Data Systems Ltd. [2003] EWCA Civ. 492 (11 April 2003)

The Court of Appeal held that the services supplied by EDS to Lloyds TSB Bank plc under the 1999 agreement constituted 'the negotiation of credit' within Article 13B(d)(1) and/or 'transactions concerning payments/transfers' within Article 13B(d)(3) of the Sixth Directive, and thus were exempt from VAT. The court...

Source-derived case information.

Citation
[2003] EWCA Civ 492
Parties
Appellant: Commissioners of Customs and Excise; Respondent: Electronic Data Systems Ltd
Jurisdiction
England and Wales
Judgment Date
11 April 2003
Procedural Posture
VAT Appeal / Court of Appeal Judgment
Outcome
Appeal dismissed; Tribunal decision upheld
Legal Topics
VAT Exemption, Interpretation of Sixth Directive, Negotiation of Credit, Transactions Concerning Payments and Transfers
Tax Law European Union Law VAT Exemption Interpretation of Sixth Directive Negotiation of Credit Transactions Concerning Payments and Transfers

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Summary, issues, holding and outcome

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Parties

Commissioners of Customs and Excise

Appellant

Electronic Data Systems Ltd

Respondent

Procedural Posture

VAT Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether services supplied by EDS to Lloyds TSB Bank plc are exempt from VAT under Article 13B of the Sixth Directive
  2. 2 Whether the supply constitutes 'negotiation of credit' under Article 13B(d)(1)
  3. 3 Whether the supply constitutes 'transactions concerning payments/transfers' under Article 13B(d)(3)

Ratio Decidendi

The Court of Appeal held that the services supplied by EDS to Lloyds TSB Bank plc under the 1999 agreement constituted 'the negotiation of credit' within Article 13B(d)(1) and/or 'transactions concerning payments/transfers' within Article 13B(d)(3) of the Sixth Directive, and thus were exempt from VAT. The court found that EDS's functions went beyond mere administrative or technical services and fulfilled the essential aspects of the exempt transactions, consistent with the principles established in SDC, CSMA, FDR, and BAA. The court rejected the Commissioners' argument that only services provided directly by financial institutions or involving direct negotiation of specific credit...

Court Disposition

Appeal dismissed; Tribunal decision upheld

Orders

  • EDS's supply of services to Lloyds TSB Bank plc is exempt from VAT under Article 13B(d)(1) and/or (3) of the Sixth Directive
  • No VAT is chargeable on the relevant services supplied by EDS under the 1999 agreement