Bookit Ltd v Revenue & Customs [2014] UKFTT 856 (TC) (01 September 2014)

Bookit Ltd v Revenue & Customs [2014] UKFTT 856 (TC) (01 September 2014)

The Tribunal held that the card handling fees charged by Bookit Ltd fall within the scope of the exemption for transactions concerning payments under Article 135(1)(d) of the Principal VAT Directive, as the services provided by Bookit effect the transfer of funds and entail changes in the legal and financial situation between the customer and Bookit. The Tribunal found that the facts were not materially distinguishable from the Court of Appeal's decision in Bookit (2006), and subsequent CJEU case law did not render that decision inconsistent. However, the Tribunal determined that there is sufficient doubt in light of subsequent European case law to warrant a reference to the CJEU for a...

Citation
[2014] UKFTT 856
Parties
Appellant: Bookit Ltd; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
01 September 2014
Procedural Posture
VAT Appeal (first Tier Tribunal Tax) / Substantive Decision After Hearing
Outcome
Reference to the CJEU for a preliminary ruling; no final determination on VAT liability pending the CJEU's decision.
Legal Topics
VAT Exemption, Financial Transactions, Card Handling Fees, Debt Collection, Abuse of Rights, Preliminary Reference to CJEU
Tax Law European Union Law VAT Exemption Financial Transactions Card Handling Fees Debt Collection Abuse of Rights Preliminary Reference to CJEU

Case Brief

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Parties

Bookit Ltd

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

VAT Appeal (first Tier Tribunal Tax) / Substantive Decision After Hearing

Legal Issues

  1. 1 Whether card handling fees charged by Bookit Ltd are exempt from VAT as transactions concerning payments under Article 135(1)(d) of the Principal VAT Directive
  2. 2 Whether the services amount to debt collection and are thus excluded from exemption
  3. 3 Whether the arrangements constitute an abuse of rights under EU law

Ratio Decidendi

The Tribunal held that the card handling fees charged by Bookit Ltd fall within the scope of the exemption for transactions concerning payments under Article 135(1)(d) of the Principal VAT Directive, as the services provided by Bookit effect the transfer of funds and entail changes in the legal and financial situation between the customer and Bookit. The Tribunal found that the facts were not materially distinguishable from the Court of Appeal's decision in Bookit (2006), and subsequent CJEU case law did not render that decision inconsistent. However, the Tribunal determined that there is sufficient doubt in light of subsequent European case law to warrant a reference to the CJEU for a...

Court Disposition

Reference to the CJEU for a preliminary ruling; no final determination on VAT liability pending the CJEU's decision.

Orders

  • Questions to be referred to the Court of Justice of the European Union for a preliminary ruling on the scope of the exemption for transactions concerning payments under Article 135(1)(d) of the Principal VAT Directive and its application to the appellant's services.
  • All other issues stayed pending the outcome of the CJEU reference.