Zipvit Ltd v Revenue & Customs [2014] UKFTT 649 (TC) (03 July 2014)

Zipvit Ltd v Revenue & Customs [2014] UKFTT 649 (TC) (03 July 2014)

Although the supplies of Mailmedia services by Royal Mail to Zipvit were standard rated as a matter of UK law (by conforming interpretation with EU law), Zipvit was not entitled to recover input VAT because VAT was neither due nor paid by Royal Mail to HMRC. The right to deduct input tax under Article 168 of the Principal VAT Directive requires that VAT be legally due or paid by the supplier; as Royal Mail did not account for or pay VAT on the supplies, and HMRC did not assess Royal Mail for VAT, no input tax was 'due or paid' for Zipvit to deduct. The absence of VAT invoices and the parties’ mutual treatment of the supplies as exempt further precluded recovery. Thus, the preliminary...

Citation
[2014] UKFTT 649
Parties
Appellant: Zipvit Limited; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
03 July 2014
Procedural Posture
VAT Input Tax Appeal / First Tier Tribunal (tax) Preliminary Issue
Outcome
Appeal dismissed
Legal Topics
VAT Exemption, Input Tax Deduction, Direct Effect of EU Directives, Conforming Interpretation, Postal Services VAT Treatment
Tax Law European Union Law VAT Exemption Input Tax Deduction Direct Effect of EU Directives Conforming Interpretation Postal Services VAT Treatment

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Parties

Zipvit Limited

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

VAT Input Tax Appeal / First Tier Tribunal (tax) Preliminary Issue

Legal Issues

  1. 1 Whether supplies by Royal Mail to Zipvit of Mailmedia services were standard rated or exempt for VAT purposes under UK and EU law
  2. 2 Whether Zipvit is entitled to recover input VAT on supplies treated as exempt by Royal Mail but which should have been standard rated
  3. 3 Whether the absence of VAT invoices precludes input tax recovery

Ratio Decidendi

Although the supplies of Mailmedia services by Royal Mail to Zipvit were standard rated as a matter of UK law (by conforming interpretation with EU law), Zipvit was not entitled to recover input VAT because VAT was neither due nor paid by Royal Mail to HMRC. The right to deduct input tax under Article 168 of the Principal VAT Directive requires that VAT be legally due or paid by the supplier; as Royal Mail did not account for or pay VAT on the supplies, and HMRC did not assess Royal Mail for VAT, no input tax was 'due or paid' for Zipvit to deduct. The absence of VAT invoices and the parties’ mutual treatment of the supplies as exempt further precluded recovery. Thus, the preliminary...

Court Disposition

Appeal dismissed

Orders

  • Preliminary issue decided against the appellant
  • No input tax recovery permitted for the relevant supplies