Paymex Ltd v Revenue & Customs [2011] UKFTT 350 (TC) (26 May 2011)

Paymex Ltd v Revenue & Customs [2011] UKFTT 350 (TC) (26 May 2011)

The Tribunal held that the services supplied by Blair Endersby in connection with the establishment and supervision of consumer IVAs are exempt supplies of financial services within the meaning of Article 135(1)(d) of the Principal VAT Directive and Item 5, Group 5, Schedule 9, VATA 1994. The Tribunal found that the services constituted intermediary services in relation to exempt financial transactions, and thus are not standard-rated for VAT purposes.

Citation
[2011] UKFTT 350
Parties
Appellant: Paymex Limited; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
26 May 2011
Procedural Posture
VAT Appeal / First Tier Tribunal (tax), Substantive Hearing and Decision
Outcome
Appeal allowed
Legal Topics
VAT Exemption, Financial Services, Intermediary Services, Individual Voluntary Arrangements (ivas), Statutory Interpretation
Tax Law Insolvency Law European Union Law VAT Exemption Financial Services Intermediary Services Individual Voluntary Arrangements (ivas) Statutory Interpretation

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Parties

Paymex Limited

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

VAT Appeal / First Tier Tribunal (tax), Substantive Hearing and Decision

Legal Issues

  1. 1 Whether supplies made by Blair Endersby in connection with consumer IVAs are exempt supplies of financial services under Article 135(1)(d) of the Principal VAT Directive and Item 5, Group 5, Schedule 9, VATA 1994
  2. 2 Whether the services constitute intermediary services in relation to exempt financial transactions
  3. 3 Whether the supplies are standard-rated or exempt for VAT purposes

Ratio Decidendi

The Tribunal held that the services supplied by Blair Endersby in connection with the establishment and supervision of consumer IVAs are exempt supplies of financial services within the meaning of Article 135(1)(d) of the Principal VAT Directive and Item 5, Group 5, Schedule 9, VATA 1994. The Tribunal found that the services constituted intermediary services in relation to exempt financial transactions, and thus are not standard-rated for VAT purposes.

Court Disposition

Appeal allowed

Orders

  • The supplies made by Blair Endersby in connection with consumer IVAs are exempt from VAT as intermediary services in relation to financial transactions.
  • HMRC's decisions dated 15 August 2007 and 2 October 2007 are set aside.