Input tax recovery of theatre production costs: HMRC v Royal Opera House Covent Garden Foundation [2020] UKUT 132 (TCC)

Peter Mantle acted for Royal Opera House, instructed by Crowe UK LLP

Background

Supplies of theatre and museum tickets fall within the ‘cultural exemption’ under Schedule 9 of the VAT Act 1994. However, the business model of many cultural venues does not rely solely on income from ticket sales. As well as funds from public grants and endowments, many venues also make taxable supplies of food and drink at on-site bars and restaurants, or sell other merchandise too. On the input side, venues will have paid VAT on the costs of staging productions or putting on exhibitions. The present appeal concerned whether the Royal Opera House’s production costs fell to be attributed solely to its exempt sales of tickets and taxable sales of programmes, or alternatively to a wider range of taxable supplies, principally its bar and restaurant offerings.

The opera house (“ROH”) relied on recent European caselaw to argue that in economic terms there was a direct and immediate link between its production costs and catering supplies. ROH succeeded before the First-Tier Tribunal on that basis (see [2019] UKFTT 329 (TC)), but the Upper Tribunal (Morgan J and Judge Timothy Herrington) have now overturned that decision.

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The comments made in this case note are wholly personal and do not reflect the views of any other members of Monckton Chambers, its tenants or clients.

The German Federal Constitutional Court on bond buying by European Central Bank and EU law supremacy

On 5 May 2020, the German Federal Constitutional Court (BVerfG) held that the European Court of Justice (ECJ) had exceeded its jurisdiction by handing down the 2018 judgment in Case C-493/17 Weiss. As the ECJ judgment was ultra vires, the German Court concluded that it was not binding in Germany. This is the first time that a German court refuses to apply the principle of supremacy of EU law.

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The comments made in this case note are wholly personal and do not reflect the views of any other members of Monckton Chambers, its tenants or clients.

Case C-405/18 AURES Holdings a.s. v Odvolací finanční ředitelství ECLI:EU:C:2020:127

Brendan McGurk represented the UK Government (intervening).

A. Introduction

Unlike indirect taxation, direct taxation is not harmonised at EU level and in principle Member States are free to administer their direct tax systems as they wish. However, under EU law this freedom is not unlimited. Fifteen years ago, the judgment in Marks & Spencer Plc v Halsey (Inspector of Taxes) (C-446/03) EU:C:2005:763 held that tax rules preventing a company claiming relief for losses incurred by a non-resident subsidiary contravened Article 49 TFEU and the right to freedom of establishment where equivalent losses would have been deductible if incurred by a resident subsidiary. Although the Court had accepted that a restriction of this kind could be objectively justified in some circumstances to maintain fiscal autonomy, avoid double counting of losses and prevent tax avoidance, it found on the facts the measures there were disproportionate. Unsurprisingly, multinational companies have subsequently sought to extend the Marks & Spencer principle to other situations so as to benefit from cross-border group relief more generally; the present case represents the latest (unsuccessful) attempt to do so.

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The comments made in this case note are wholly personal and do not reflect the views of any other members of Monckton Chambers, its tenants or clients.

A “Cardinal Democratic Freedom”: High Court rules police’s action “Orwellian” in a victory for freedom of expression

The Queen on the application of Harry Miller v (1) The College of Policing and (2) The Chief Constable of Humberside

Ian Wise QC acted for Mr Miller throughout the proceedings, instructed by Sinclairslaw. Michael Armitage assisted Ian in preparing the detailed legal submissions for the hearing.

Overview

On 14 February 2020, the High Court (Mr Justice Julian Knowles) held that Humberside Police had disproportionately interfered with the rights of free speech of the Claimant, Harry Miller, under Article 10 of the European Convention on Human Rights (“ECHR”).
Mr Miller had posted a number of tweets which a member of the public had complained were “transphobic”. Humberside Police recorded this as a “non-crime hate incident” and warned Mr Miller that he may face criminal prosecution if he continued to post similar tweets. The High Court, in an emphatic defence of freedom of expression in a democracy, ruled that the Claimant’s tweets formed part of a legitimate public debate about proposed reforms to the Gender Recognition Act 2004.

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The comments made in this case note are wholly personal and do not reflect the views of any other members of Monckton Chambers, its tenants or clients.

Ocean Outdoor v London Borough of Hammersmith & Fulham [2019] EWCA Civ 1642

Philip Moser QC and Ewan West appeared on behalf of the Appellant.

A. Introduction

In a major judgment handed down by the Court of Appeal last week, Coulson LJ has given important guidance on the scope of the Concessions Contract Regulations 2016 (“the CCRs”), the extent of the land transaction exemption, and the requirements for claimants to show ‘sufficiently serious breach’ in procurement claims more generally. This was the first case to consider the CCRs in such a level of detail, and – in a ruling likely to be welcomed by public authorities – the meaning of ‘concession contract’ for the purposes of the Regulations is construed relatively narrowly, with the land transaction exemption given a conversely generous interpretation. The judge’s comments on the hurdles which a claimant must surmount to be awarded Francovich damages for breaches of procurement law also have a notably pro-defendant slant.

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The comments made in this case note are wholly personal and do not reflect the views of any other members of Monckton Chambers, its tenants or clients.

Achilles Information Limited v Network Rail Infrastructure Limited [2019] CAT 20

Philip Woolfe and Stefan Kuppen appeared on behalf of the Claimant.

Preliminary

  1. Achilles Information, a provider of ‘supplier assurance’ to the rail sector and other industries, successfully challenged Network Rail for breaches of both Chapter I and Chapter II of the Competition Act 1998. The Claim related to the terms of certain authorisation schemes operated by Network Rail, which authorised suppliers providing services on Network Rail infrastructure. The terms required, as a condition of authorisation,that suppliers obtained assurance from Network Rail’s chosen provider,RISQS. The decision underlines that public-sector entities need to be alert to the potential application of competition law even where they are pursuing public interest objectives.

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The comments made in this case note are wholly personal and do not reflect the views of any other members of Monckton Chambers, its tenants or clients.

Vodafone & Ors. v The Office of Communications

Philip Woolfe appeared on behalf of EE Limited

Preliminary

In Vodafone v Ofcom [2019] EWHC 1234 (Comm), the Commercial Court dealt, for the first time, with an important point in the law of unjust enrichment concerning the counterfactual yardstick against which restitution should be measured.

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The comments made in this case note are wholly personal and do not reflect the views of any other members of Monckton Chambers, its tenants or clients.

Merricks v Mastercard [2019] EWCA Civ 674: collective proceedings in competition law revitalised by the Court of Appeal

On 16 April 2019, the Court of Appeal allowed Mr Merrick’s appeal from the Competition Appeal Tribunal’s (“CAT”) refusal to grant a collective proceedings order (“CPO”). The CAT’s order is, accordingly, set aside and the application for certification is remitted to the CAT for a re-hearing.

Given the infancy of the collective actions regime, the Court of Appeal’s judgment is of significant importance. This case note discusses the judgment and summarises its implications for those bringing and defending collective proceedings.

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The comments made in this case note are wholly personal and do not reflect the views of any other members of Monckton Chambers, its tenants or clients.

Case note: SAE Education Ltd v Commissioners for Her Majesty’s Revenue and Customs

The Supreme Court’s judgment in SAE represents the end of a story that can be traced back to at least 2001, and the decision of Burton J in Customs and Excise Comrs v School of Finance and Management London Ltd [2001] STC1960 (‘SFM’). That case, like SAE, concerned whether a body making supplies of higher education was entitled to exemption from VAT under the provisions of the Value Added Tax Act 1994 (‘the VAT Act ‘) . In both cases, exemption turned on whether the supplying body could be categorised properly as a ‘college of a university’ for the purposes of the Act, under the so-called ‘education exemption’.

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The comments made in this case note are wholly personal and do not reflect the views of any other members of Monckton Chambers, its tenants or clients.

The Wellcome Trust Ltd v HMRC

In the recent case of The Wellcome Trust Ltd v HMRC [2018] UKFTT 599 the First-tier Tribunal (“FTT”) considered the interpretation of “a taxable person acting as such” in Article 44 of the Principle VAT Directive (“PVD”).

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The comments made in this case note are wholly personal and do not reflect the views of any other members of Monckton Chambers, its tenants or clients.

This case note was first featured in the December 2018 issue of De Voil.