Commentary

RCB/43/10 VAT — “Italian Republic” claims for overpaid VAT – partial exemption implications of the ECJ decision in Nordania Finans

Part V16 Forms and other HMRC material

RCB/43/10 VAT — “Italian Republic” claims for overpaid VAT – partial exemption implications of the ECJ decision in Nordania Finans

RCB/43/10 VAT — “Italian Republic” claims for overpaid VAT – partial exemption implications of the ECJ decision in Nordania Finans

Revenue & Customs Brief, Issue 43. 12 October 2010

This Brief gives information concerning a review by HM Revenue & Customs (HMRC) of the proper treatment of claims submitted as a result of the Italian Republic ECJ decision (C-45/95). The claims are for output tax over-declared on car sales where input tax was blocked on the purchase of the cars and typically involve the sale of demonstrator vehicles, courtesy cars and daily rental vehicles by businesses in the motor trade. A large number of such claims were submitted following the House of Lords decision in Fleming/Condé Nast. UK law on the input tax block was changed in 1999 and so these claims are for historic periods only.

Following a review of the implications of the ECJ decision in Nordania Finans, HMRC is of the view that these claims did not take proper account of European case law on partial exemption. As a result HMRC is asking those businesses whose claims have not yet been paid to revise

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