Jurisdiction(s):
United Kingdom

UK Supreme Court clarifies time of supply: success fees invoiced after leaving VAT group taxable under Article 64 and Reg 90 despite intra‑group performance

Published on: 12 September 2025

Published by a LexisNexis Tax expert

Legal News

Article summary

The Prudential Assurance Company Ltd v Commissioners for His Majesty’s Revenue and Customs [2025] UKSC 34

Background

This appeal addresses how section 43 of the Value Added Tax Act 1994 (VATA 1994), which governs VAT groups, interacts with domestic and EU rules fixing the moment at which services between companies are treated as supplied for VAT. Under VATA 1994, s 43, companies within the same corporate group may elect to be regarded as a single taxable person for VAT. Consequently, where one group member provides goods or services to another member, no VAT is charged on that intra-group transaction. This follows from the statutory direction that, within a VAT group, any supply by one member to another is to be ignored for VAT purposes. The issue arises where there is a gap between carrying out the services and issuing or paying the VAT invoice, during which the supplying company departs the VAT group. The question is how the law operates in that scenario: does the VAT position turn on the timing of performance, or on the later invoicing or payment point when the supplier is no longer within the group, and is the effect that VAT does...

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