HMRC v Newey T/A Ocean Finance was heard by the Court of Appeal in January 2018. Owain Thomas QC and Isabel McArdle acted for the Commissioners in this case concerning questions of who the true supplier of loan broking services is, and who the true recipient of advertising services is, where a Jersey structure is established to provide a VAT advantage to a business offering loans to UK consumers. The case also raises issues in relation to what abuse means in the context of an offshore structure, created to reduce the tax payable in relation to trade with consumers in the EU.

The case has resulted in a reference to the CJEU on questions arising from the abuse principle. The Court of Appeal allowed HMRC’s appeal, finding that the correct legal test had not been applied to the facts of the case. The matter will now be remitted to the First-tier Tribunal.