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HMRC internal manual

VAT Retail schemes guidance

From
HM Revenue & Customs
Updated
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Eligibility and refusal to allow use of a retail scheme: The power to refuse use of a retail scheme: Protection of the revenue

In the High Court case of Svenska International Plc [1996] STC 1000 at page 1007 (e-f) Mr Justice Carnwath referred to the issue of protection of the revenue as a

‘term which would entitle the Commissioners to take account of future tax as well as accrued tax.’

Although this comment was obiter (by the way), it provides support for the view that the power can be considered in situations where:

  • VAT has or may become due and the revenue needs to be protected because there are doubts about our ability to collect that VAT;
  • arrangements are put in place to prevent VAT from properly becoming due and the revenue needs to be protected in order to make that VAT become due; and
  • arrangements are put in place to generate an unjustified tax advantage.