We were instructed by Wills Accountants regarding the possibility of reclaiming VAT for one of their clients who undertook a storage container business. We ran an argument that the original letting of storage space was an exempt supply for VAT purposes using as our authority a recently decided case, such that our client was therefore due a repayment of overpaid VAT.
HMRC originally countered that any VAT repayment would be precluded through the principle of "unjust enrichment", we have just successfully rebutted this argument. HMRC are now likely to appeal the original decision to the upper tribunal and await confirmation of this fact before pursuing this matter further.
This matter involved advising the clients on the most effective share scheme for their group structure and an analysis of the structure to ascertain whether the issuing company qualified for the purposes of the EMI legislation.
The client was very much "hands on" and had to be kept fully informed regarding the progress made in drafting the relevant documents and their contents. Explanatory documents had to be produced for the client and the affected employees on the tax treatment of the options at the date of grant and future exercise.
China Fleet Country Club
The client has challenged HMRC regarding their interpretation of the Sporting Directive regarding the application of VAT to non-member fees. The work to date has required a detailed analysis of both the Directive and the attendant UK legislation. The case was originally heard in the First Tier Tax Tribunal and judgement was eventually passed down favouring our interpretation of the Directive.
Following an HMRC appeal to the Upper Tribunal the matter has been remitted to the European Court on two points, each requiring an analysis of the wording of the Directive and it's intended effect. The decision of the court is expected early next year.