872. The European legislative basis for VAT.

Although the statutory basis of value added tax (VAT) in United Kingdom law is the Value Added Tax Act 1994, 1the Act itself was derived from the 'Sixth Directive'2. This directive has since been replaced by the 'Principal (VAT) Directive'3.

In matters relating to VAT, where actions will generally involve disputes with the Commissioners for Her Majesty's Revenue and Customs, the taxpayer may be entitled to rely on the direct effect of appropriate provisions of the Sixth Directive4 (and now the Principal Directive), whilst the Commissioners are obliged to have regard only to domestic legislation5.

The United Kingdom exited the European