The First-tier Tribunal has released an important decision in Barclays Service Corporation v. HMRC [2024] UKFTT 785 (TC). The main question considered by the FTT concerned whether a UK branch of a US company had sufficient human and technical resources in the UK for it to constitute a “fixed establishment”. The FTT agreed with HMRC that the UK branch did not constitute a fixed establishment, with the result that the US company was not eligible to join the Barclays VAT group. The FTT also considered (more briefly) (i) whether the UK’s VAT grouping rules could be interpreted consistently with the CJEU’s decision in Danske Bank A/S, Danmark, Sverige Filial v. Skatteverket (Case C-812/19); and (ii) HMRC’s “protection of the revenue” powers.
The decision in Barclays follows the Upper Tribunal’s decision in HSBC Electronic Data Processing (Guangdong) Limited v. HMRC [2022] UKUT 41 (TCC), which established certain key principles concerning VAT grouping.
Edward appeared for HMRC in Barclays along with Hui Ling McCarthy KC and Michael Ripley (both of 11 New Square). The taxpayers were represented by Andrew Hitchmough KC and Zizhen Yang (both of Pump Court Tax Chambers). Edward also appeared in HSBC.
For the FTT’s decision, see here.
