Constable VAT Focus 5 May 2022


Certificate of status of taxable person
A UK business registered for VAT that is claiming a VAT refund in another country can ask HMRC for a certificate of status to confirm they are trading in the UK. From 1 May 2022, HMRC has changed the way it issues a certificate of status of taxable person to UK businesses and the above guidance has been updated to include the new process for obtaining a certificate.

Apply for the Fulfilment House Due Diligence Scheme
The guidance above helps sellers established outside the UK find out if they need to register to store goods in the UK. HMRC has updated this guidance for new owners of existing approved businesses.

Motoring expenses (VAT Notice 700/64)
HMRC has recently updated the above guidance to include changes that came into effect from 1 April 2022 regarding early terminations of leases and the 50% block.

VAT road fuel scale charges from 1 May 2022 to 30 April 2023
The VAT road fuel scale charges have been amended with effect from 1 May 2022. Businesses must use the new scales from the start of the next prescribed accounting period beginning on or after 1 May 2022.

Register for the VAT Agricultural Flat Rate Scheme
HMRC has updated the above guidance to confirm that businesses already VAT registered will not need to submit a VAT1 but must still complete a VAT98 to register for the Agricultural Flat Rate Scheme.


Since the end of the transitional period on 31 December 2020 European Court judgements are not binding on the UK in most cases. However, it is expected that UK courts will still take these judgements into consideration when reaching their own conclusions and there may be occasions where they have a more binding effect. We will therefore continue to include summaries of any European judgements that we consider to be relevant. If you are concerned about the impact of any matters raised in the following cases, please contact us.


1. Multi-Purpose Vouchers

This case concerned DSAB Destination Stockholm AB (DSAB) and the supply of a ‘city card’ to tourists visiting Stockholm, Sweden. The card gives the cardholder the right to be admitted to around 60 attractions, as well as passenger transport services, for a limited period of time and up to a certain value. The card can be used as a means of payment for the attractions and services, some of which are subject to VAT at 6% to 25% whilst some are VAT exempt.

The Swedish tax authorities took the view that the card issued is not a “multi-purpose voucher” (MPV) under the EU law. It argued that the definition of voucher states it must have a certain nominal value or relate to certain specified supplies of goods or services.

DSAB on the other hand argued that the card was a voucher, arguing that the suppliers were obliged to accept the card as a means of payment and that the conditions applicable to the cardholders state which services may be paid for with the card. Additionally, the card qualified as an MPV as it can be used to obtain supplies chargeable to differing VAT rates. As a result of the dispute, the question referred to the CJEU was:

  • Must Article 30(a) of the VAT Directive, be interpreted as meaning that a card which gives the cardholder the right to receive various services at a given place for a limited period of time and up to a certain value constitutes a voucher and, in such circumstances, constitutes a multi-purpose voucher?’

The CJEU first considered whether the card is a voucher. It stated that there are two conditions for a card to be a voucher. First, there should be an obligation to accept it as consideration and second, the goods or services to be supplied, or the identity of the supplier, is indicated on the card or terms and conditions relating to the card. The CJEU confirmed that the card issued by DSAB met both these conditions.

With regards to the question of whether the card is an MPV, the CJEU stated that any vouchers that are not single purpose vouchers, should be considered as multi-purpose vouchers. A single purpose voucher is one where the place of supply and VAT due on the goods and services is known at the time of issue. The card issued by DSAB allows access to various supplies of services which are subject to different rates of VAT or are VAT exempt, therefore it is impossible to predict in advance which supplies of services will be selected by the cardholder, on this basis the card should be considered a multipurpose voucher.

The CJEU concluded that Article 30a of the VAT Directive must be interpreted as meaning that an instrument which gives the bearer thereof the right to benefit from various services at a given place, for a limited period and up to a certain amount, may constitute a ‘voucher’ even if on account of the limited validity period of that instrument, an average consumer cannot take advantage of all the services offered. That instrument constitutes a ‘multi-purpose voucher’ since the VAT due on those services is not known at the time of issuance of that instrument.

Constable Comment:  This is the first time the CJEU has ruled on the new definitions of “voucher” and “multi-purpose voucher” for VAT purposes as described in the new voucher rules of the VAT Directive applicable from 1 January 2019. The CJEU confirmed the fact that there is a limited period of validity of the card is not relevant for its classification as a voucher. Additionally, it classifies as a MPV as the VAT payable on those services is not known at the time of issue of the card.


2. Insurance intermediary supplies – supply of Black Boxes?

This case concerned WTGIL Limited (“Ingenie”), an insurance intermediary which develops, markets, and sells telematics car insurance (known as black box insurance). Ingenie is not an insurer. As a condition of the insurance, a telematics device must be fitted to the policyholder’s car. Ingenie provides the telematics device and arranges for it to be fitted in the customers vehicles. The device captures information about how the car is being driven, Ingenie collects and analyses the data from the device and provides this data to the policyholder and insurer. The purpose of providing such data is to enable the policyholder to improve their driving and thus obtain cheaper car insurance.

In 2018 Ingenie made a claim for a refund of £2,084,149 input tax incurred in relation to the provision and fitting of the devices. This was on the basis that the provision of fitting of devices were taxable supplies, whether or not for consideration, and the input tax was attributable to such taxable supplies. HMRC rejected the claim on the grounds that the commission paid by the insurers to Ingenie was consideration for exempt supplies of insurance intermediary services and any input tax directly linked to the supply of the device was irrecoverable.

The first issue before the Tribunal was whether Ingenie makes supplies of the device and related services to the policyholders for consideration. Both the contractual arrangements and the economic and commercial reality of the transactions were considered, and the Tribunal held there is no supply of the devices or any services relating to the devices by Ingenie to the policyholder for VAT purposes.

The Tribunal considered that there was no supply of goods by Ingenie and noted that the Principal VAT Directive provides that a supply of goods for VAT purposes means the transfer of the right to dispose of tangible property as owner. The policy booklet confirmed that the policyholder does not obtain any right to dispose of the device at any point during the time of policy. Additionally, the device did not pass to the insurer.

The Tribunal stated that although there was no supply of goods that does not mean that there is no supply in relation to the device. Ingenie agreed to arrange for a device to be installed in the policyholder’s car and then to use it to collect the telematics data which Ingenie used to give feedback to the policyholder and to provide more detailed information to the insurer. Those activities may constitute supplies of services but only if made in return for consideration. However, the Tribunal noted that the contract between the insurer and the policyholder states that the policyholder will not be charged for their first device, or its fitting, provided they do not cancel their policy during the first period of insurance. The policy booklet also states that the policyholder is not liable for the cost of transmitting data to and from the device.

As the Tribunal considered that there was no supply of the devices or any services relating to the devices by Ingenie to the policyholder for VAT purposes, the second issue before the Tribunal was whether Ingenie made a deemed supply of goods when it provided the device to the policyholders. It considered a deemed supply only arises where the taxable person is entitled to a full or partial recovery of the input VAT incurred on the assets concerned and the deemed supply is necessary to ensure that the goods are not retained or consumed without bearing VAT. As Ingenie did not recover any input VAT in relation to the devices, there was no deemed supply of goods when title to a device passes to the policyholder after the insurance has lapsed or been cancelled. The Tribunal also considered that the devices were acquired and provided to the policyholder by Ingenie for the purposes of its own business in order to meet its obligations under the terms and conditions. It appeared to the Tribunal that rather than disposing of the device when the insurance ends, Ingenie merely abandons any claim to it because it no longer has any value or serves any purpose for Ingenie.

As Ingenie was not viewed as making supplies or deemed supplies to the policyholders the appeal was dismissed.

Constable Comment: This case considered whether a business had made taxable supplies or deemed supplies to the insurance policyholder to allow input VAT recovery. Had the court decided that a taxable supply or deemed supply had been made it would have been necessary to consider how the VAT chargeable on such a supply should be calculated. In this case, as Ingenie was not viewed as making supplies to the policyholder, the Tribunal did not need to address the submissions made by counsel on the value of any non-monetary consideration and whether it could be expressed in money terms.

Please note that this newsletter is intended to provide a general overview of the subject. 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 blog post. Specialist VAT advice should always be sought in relation to your particular circumstance.