The ECU Group plc v Revenue & Customs [2010] UKFTT 297 (TC) (01 July 2010)

The ECU Group plc v Revenue & Customs [2010] UKFTT 297 (TC) (01 July 2010)

The essential aim and features of the Appellant’s services are the procurement for the client, by means of foreign exchange transactions, of a reduction in the capital value of a loan. The services form a distinct whole fulfilling the essential functions of transactions concerning currency and/or payments or transfers under article 135(1)(d) and (e) of the VAT Directive and item 1 of Group 5, Schedule 9, VATA. Where a Prime Broker is used, the services also fall within the exemption for intermediary services under item 5, Group 5, Schedule 9, VATA. The appeal is allowed and the services are exempt from VAT.

Citation
[2010] UKFTT 297
Parties
Appellant: The ECU Group plc; Respondents: The Commissioners for Her Majesty’s Revenue and Customs (Value Added Tax)
Jurisdiction
United Kingdom
Judgment Date
01 July 2010
Procedural Posture
VAT Exemption Appeal (first Tier Tribunal, Tax) / Final Judgment
Outcome
Appeal allowed
Legal Topics
VAT Exemption, Financial Services, Currency Transactions, Intermediary Services
Tax Law European Union Law VAT Exemption Financial Services Currency Transactions Intermediary Services

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Parties

The ECU Group plc

Appellant

The Commissioners for Her Majesty’s Revenue and Customs (Value Added Tax)

Respondents

Procedural Posture

VAT Exemption Appeal (first Tier Tribunal, Tax) / Final Judgment

Legal Issues

  1. 1 Whether the Appellant's services in managing foreign currency exposure of multi-currency loans are exempt from VAT under article 135(1)(d) and (e) of the VAT Directive and corresponding UK legislation.
  2. 2 Whether the services constitute 'transactions concerning currency', 'transactions concerning payments or transfers', or 'intermediary services' as defined in the relevant legislation.

Ratio Decidendi

The essential aim and features of the Appellant’s services are the procurement for the client, by means of foreign exchange transactions, of a reduction in the capital value of a loan. The services form a distinct whole fulfilling the essential functions of transactions concerning currency and/or payments or transfers under article 135(1)(d) and (e) of the VAT Directive and item 1 of Group 5, Schedule 9, VATA. Where a Prime Broker is used, the services also fall within the exemption for intermediary services under item 5, Group 5, Schedule 9, VATA. The appeal is allowed and the services are exempt from VAT.

Court Disposition

Appeal allowed

Orders

  • The Appellant’s services are exempt from VAT for the reasons given in the decision.
  • The Respondents are directed to pay the Appellant’s costs to be assessed (if not agreed) pursuant to rule 29(1)(b) of the VAT Tribunals Rules 1986.