Constable VAT Focus 4 June 2020


VAT Toolkits
HMRC has updated the Agent Toolkits for input tax, output tax and partial exemption with minor changes.

VAT Government & Public Bodies
New specific bodies have been added to s33E VATA 1994 to reflect SI (2020/185)

Importing Animals for Scientific Research
HMRC has issued new Guidance explaining how to import animals for research free of duty and VAT.

Importing biological and chemical substances for research purposes
HMRC has issued new Guidance on how to get duty and VAT relief if you are importing biological and chemical substances for research purposes from outside the EU and UK.


As the ongoing COVID-19 pandemic continues to impact businesses across the world, many countries are using VAT as a measure to provide reliefs to businesses which are struggling. Our coverage of the measures being taken by different European countries aims to provide a synopsis of the VAT related measures being taken to aid those struggling to meet financial obligations. We continue to update our coverage of this topic which can be read here.


Upper Tier Tribunal

1. Acquisitions into Warehouses in Other Member States

This case concerned Ampleaward Ltd which is an alcohol wholesaler in the UK. Ampleaward had been assessed for £1,308,648.00 unpaid acquisition VAT with regard to purchases of alcohol it had made from a supplier in a different member state, which were delivered to a bonded warehouse in a third member state of the EU. Ampleaward believed that the acquisitions were exempt by virtue of s18 VATA, HMRC argued that s18 did not apply in the present circumstances.

Ampleaward argued that its acquisition of alcohol was not subject to VAT as s18 of VATA provides that where dutiable goods, such as alcohol, are acquired from another member state and are entered into a warehousing regime, no acquisition VAT is due. HMRC argued that s18 could not apply as the warehouse into which Ampleaward entered the alcohol was not within the UK.

Whilst s18 is quite clear that the warehouse into which goods are entered does not need to be located in the UK, HMRC argued that the law must be read in line with the purpose of the EU provision which entitles member states to exempt intra-community acquisitions of goods into warehousing regimes. It suggested that, on such a purposive interpretation, s18 should not apply and that acquisition VAT was due in the UK on the purchase made by Ampleaward.

The Tribunal considered the EU provisions and agreed with HMRC’s interpretations that the EU law does not dictate that the relevant provisions apply to warehousing regimes in any member state. Therefore, HMRC urged the Tribunal to “read down” the purposive interpretation of the EU provision to override the UK statute. This is something of a surprising argument as it goes against the constitutional principles of the UK legal system.

The Tribunal observed that, whilst it may agree with HMRC’s interpretation of the EU provisions, to “read down” and essentially override the UK statute would be unacceptable and would violate the principle of legal certainty. Whilst EU law should be read purposively, the Tribunal observed that there is a line which must not be crossed between interpretation of legislation and amendments to the law.

The Tribunal held in favour of Ampleaward, holding that no acquisition VAT was due in the UK on the purchase of alcohol which was delivered to a bonded warehouse in a third member state.

Constable Comment: This case considered the correct way in which to read EU law and how this should be applied in the UK. Whilst the debate within the obiter dicta around this point is interesting, the position in UK law is clear and it does not infringe on the rights given to member states by the EU legislation so HMRC’s argument did not succeed.

This newsletter is intended as a general guide to current VAT issues and is not intended to be a comprehensive statement of the law. No liability is accepted for the opinions it contains or for any errors or omissions. Constable VAT cannot accept responsibility for loss incurred by any person, company or entity as a result of acting, or failing to act, on any material in this newsletter. Specialist VAT advice should always be sought in relation to your particular circumstance.