Revenue and Customs Brief 37/14 confirming HMRC’s position following the Court of Justice of the European Union (CJEU) judgment in the VAT grouping Swedish case of Skandia has now been published.

The case concerned the interaction of VAT grouping rules on transactions between establishments of a business established both outside and inside Sweden. The CJEU found that the effect of the Swedish rules was that there was a taxable supply for VAT purposes.

The brief is essentially a holding Brief, noting that the UK VAT grouping rules differ from the Swedish VAT grouping rules and that the judgment did not consider:

• what the position under the UK rules should be; and
• whether the Swedish rules were the only permissible VAT grouping rules.

HMRC added that they are carefully considering the judgment and will provide a further update in due course. In the meantime, businesses should continue to follow existing guidance.

The Irish Revenue is currently reviewing the implications of this CJEU ruling for Irish law and will consult with interested parties, which will include Chartered Accountants Ireland. Guidance is expected to publish from Revenue following this review process.

A summary of the Skandia case featured in the November 2014 issue of tax.point.

HMRC Brief 37/14 is published on here.