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The Supreme Court has given judgment in this important case concerning the circumstances in which the domestic courts are required to make a reference to the Court of Justice of the European Union.

The issue in the appeal was whether Aimia, which operates the Nectar reward scheme, is entitled to deduct as input tax the VAT element of payments which it makes to retailers which redeem Nectar points for collectors. That issue turned on whether the payments were properly to be considered as solely comprising third party consideration for the redeemer’s supply of goods and services to the collector, or as also comprising consideration for the redeemer’s supply to Aimia of the services for which Aimia has contracted with it.

In 2008, the House of Lords made a preliminary reference to the CJEU seeking a ruling on questions of EU law. Having considered the CJEU’s judgment, the Supreme Court by a majority decided the issue in Aimia’s favour: [2013] UKSC 15. However, following receipt of a draft of the Court’s judgment, HMRC argued that there should be a second reference to the CJEU. 

The Supreme Court has now unanimously accepted Aimia’s submission that a second reference was unnecessary. The view of the majority of the Court in the first judgment had been that the case could be decided by applying well-established principles to the particular facts. Although the minority had questioned the approach adopted in the majority judgments to the application of EU law and to the judgment of the CJEU, those criticisms were not accepted by the majority, and they were not regarded by the Court as now requiring or justifying a further reference.

The judgment is available at: 

Lord Pannick QC and Iain Steele acted for Aimia. 

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