Revenue
Associated companies forming VAT group - one company ceasing to be eligible to be a member - membership of VAT group continuing until date specified by commissioners Commissioners of Customs and Excise v Barclays Bank plc: CA (Sir Andrew Morritt V-C, Lords Justice Buxton and Arden): 17 October 2001The taxpayer controlled a VAT group of companies of which T was a member.
In 1995 T was transferred to a charitable trust.The taxpayer immediately informed the commissioners of the transfer and claimed that by section 43 of the VAT Act 1995 from the point of transfer T was no longer eligible, and ceased to be a member, of its VAT group.The commissioners did not accept that contention and notified the taxpayer that T would not be removed from the VAT group until the end of the accounting period.The VAT and Duties Tribunal and the High Court held that T had ceased to be a member of the group at the date of transfer.
The commissioners appealed.Nigel Pleming QC and Alison Foster (instructed by the Solicitor, Commissioners of Customs and Excise) for the commissioners.
David Milne QC, Greg Sinfield and James Henderson (instructed by Lovells) for the taxpayer.Held, allowing the appeal, that the express provisions for the termination of group treatment contained in section 43(5)(b) and (6) did not provide that it should be coterminous with the cesser of eligibility; that there was no sufficient reason to imply such a provision notwithstanding that a company could continue to enjoy the benefit of group relief after it had ceased to be eligible; and that, accordingly, T remained part of the taxpayer's VAT group after it had been transferred and until the date specified by the commissioners.
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