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In one of the last cases to be referred by the Supreme Court to the CJEU before Brexit, the European Court gave judgment on 13 January 2022 in this long running VAT dispute, worth over £1 billion.

HMRC, represented by Sam Grodzinski QC, succeeded in establishing that traders could not claim input tax when, at the time of the supplies, everyone had treated the supplies as VAT exempt, even though (after the supplies were made) the law was clarified to mean that the supplies had been taxable after all. The CJEU found that where the supplier (Royal Mail) had not claimed the VAT back from the traders (nor paid it to HMRC), those traders could not claim an input tax credit on the basis that the VAT had been “due or paid”.

The judgment can be found here

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