Top tax cases of 2015 so far
The Tolley team outlines some of the top tax cases for 2015 so far, from cross-border group relief to compound interest on VAT.
2015 has been a flagship year for tax, with tighter rules and more devolved powers in Scotland. Here are a few of the cases which made the Tax Journal top ten for the first half of 2015.
Eclipse: was a partnership carrying on a trade?
In Eclipse Film Partner No. 35 v HMRC  EWCA Civ 95 (17 February 2015), the Court of Appeal found that Eclipse 25 had not been trading.
Why it matters to you: Like the tax tribunals, the Court of Appeal accepted that the transactions were not 'shams'. However this funding did not prevent the court from holding that on a realistic view of the facts (applying the Ramsay doctrine), Eclipse 35 has acquired an investment rather than carried on a trade.
UK rules on cross-border group relief comply with EU law
In European Commission v UK (C-172/13) (3 February 2015), The CJEU found that the UK legislation on cross-border group relief complies with EU law principles.
Why it matters to you: By confirming that the UK legislation on cross-border group relief is now compliant with the EU law principles of freedom of establishment and of movement of capital, the CJEU's decision may have come as a disappointment to some international groups.
Littlewoods: compound interest on VAT wrongly paid
In Littlewoods Ltd and others v HMRC  EWCA Civ 515 (21 May), the Court of Appeal found that Littlewoods was entitled to compound interest on VAT wrongly paid.
Why it matters to you: This is the latest instalment of a judicial saga which includes two high court decisions and a preliminary ruling by the CJEU. The tax at stake is colossal: £1.2bn in compound interest.
Colaingrove: reduced rate of VAT and complex supplies
In HMRC c Colaingrove  UKUT 80 (10 March 2015), the UT found that the reduced rate could not apply to an element of a complex supply to which the standard rate applied.
Why it matters to you: Since French Undertakers and Talacre, many have wrestled with the notion that elements of a complex standard rated supply may be taxable at a reduced rate. This case suggests that those decisions were of limited application, so that most complex supplies should be charged at a single rate. In finding as it did, the UT recognised that its decision would have undesirable results when seen from the point of view of the recipients of the supply.
To find out more about the cases above and to see the other cases which made the top ten, download the full report.