The ECJ has just given judgment in Case C-651/11 X v Staatsecretaris van Financien, which concerns the eligibility of share sales to be treated as a transfer of a going concern under what is now Article 19 of the Principal VAT Directive (PVD).  The Netherlands, like the UK, treats the transfers of the “totality of assets or part thereof” (referred to as a “transfer of a going concern” in the UK) as not being a supply of goods or services: as a result, generally the transferor and transferee can treat expenses incurred in such transfers as part of the general overheads associated with its entire economic activity and deduct input tax on those expenses accordingly.

In the case referred to the ECJ by the Dutch Supreme Court, X claimed that the sale of the 30% shareholding that it held in company (‘A’)  was a transfer of the “totality of assets or part thereof” because X also carried out management work for A for consideration.   The ECJ agreed with the Dutch Government, supported by the UK, that the claim should be rejected.  The ECJ held that the transfer of shares could not be equated to the transfer of totality of assets or part thereof.  It was irrelevant that the sale was accompanied by the sale to the same purchaser by all the other shareholders of their shareholdings in company C. The management service did not assist X because it was not an autonomous undertaking which could be operated independently by the transferee as it ceased on the sale.   The ECJ noted a previous case (SKF) where it had held that the transfer of a 100% shareholding could amount to a transfer of assets, but it cast some doubt on the correctness of, and certainly the wider application of, that earlier ruling.

The ruling essentially confirms that pure share sales are unlikely to qualify as transfers as a going concern.  It may have implications for those advising on business asset sales involving share transfers and for a number of cases currently before the tax tribunals.

Raymond Hill and George Peretz acted for the United Kingdom in the ECJ.

To read the full judgement please click here

Monckton Chambers last night delivered a very successful and topical seminar on Financial Services.

The following Members gave four short talks on recent developments in financial services with a focus on the practical and commercial implications

• Tim Ward QC – The Icesave Case: The Future of Deposit Guarantee Schemes
• Kassie Smith QC – LIBOR:Civil and Competition Law Claims
• Saima Hanif- The New Regulatory Landscape
• Brendan McGurk – Financial Mis-Selling: Interest Rate Swaps: Claims

Chaired by Andrew Lidbetter of Herbert Smith Freehills

Monckton Chambers’ Ben Lask has successfully defended Ofsted in a claim for judicial review against a decision to take regulatory action against a childcare provider.

The claim raised issues as to the ambit of an expert regulator’s discretion, procedural fairness, and the circumstances in which regulatory action might engage a provider’s rights under Article 1, Protocol 1 of the European Convention on Human Rights (the right to peaceful enjoyment of property).

The High Court upheld Ofsted’s decisions in this case and dismissed the claim.

To read the full judgement please click here.

To read the full article in The Lawyer, please click here.

Monckton Chambers is honoured to have received three nominations for The Lawyer Awards 2013.

Monckton has been shortlisted for the ‘Chambers of the Year’ award, and Melanie Hall QC and Tim Ward QC have been shortlisted in the prestigious ‘Barrister of the Year’ category.

The awards ceremony will be held at Grosvenor House, Park Lane London on 25 June.

To read the full article in The Lawyer, please click here.

Kassie Smith QC and Elizabeth Kelsey are appearing in court for Greenpeace and the National Under Ten Fishermen’s Association (NUTFA), an association of small boat in-shore fishermen, in a case concerning the Government’s allocation of fishing quota. Greenpeace and NUTFA are supporting the Government’s decision to reallocate a small amount of quota from the over 10 metres fishing fleet to the under ten metres fleet.  The case is to be heard over three days in the High Court.  It raises issues of EU law, legitimate expectation as a matter of domestic public law and arguments under the ECHR.

The case has been featured in the following press articles:

BBC News

ITV News

Channel 4 News

First-tier Tribunal (Tax Chamber)

Judgment, 29 January 2013 (released 3 May 2013)

Valentina Sloane for the Appellant, Honda

Philip Moser QC, instructed by the General Counsel and Solicitor to HM Revenue and Customs, for the Respondents, HMRC

This appeal concerned the correct customs classification of all terrain vehicles (“ATVs”) which are designed and used as tractors. It was agreed that the product was a small “tractor” and could be so classified under CN 8701, subheading 8701 90 (“Other” tractors). The question was whether they were “Agricultural and forestry tractors” (subheadings 8701 90 11 to 8701 9050), which are free of duty) or “Other other” tractors, (subheading 8701 90 90), which are subject to customs duty at 7%.

The Tribunal found that the ATVs were subject to customs duty at 7%.

The Tribunal found that the “intended use” of a product is determined by the designer, the factory and its intended use when constructed; i.e those specially designed, constructed or reinforced features which form an integral part of the product which perform a function such as lifting, excavating, etc. Features that would allow agricultural tractors to be distinguished from other tractors would be inherent in the product. The ATVs may have some use which is agricultural in nature, but in this case there were no inherent attributes which allowed this sort of activity to take place and hence nothing inherently agricultural about the product.

The Tribunal found that the relevant CNENs had to be read consistently with the CN and the relevant EU Regulation (Commission Regulation EC No 1051/2009 ) to ensure the uniform application of customs law in the EU. The word “generally” in the CNENs laid down certain design features which were expected to be found in agricultural tractors, but the ATVs in this appeal did not possess those features. It was possible that not all of the characteristics stated in the Regulation were met but the wording in the Regulation (“approximately”) was only directory in nature. In the Tribunal’s view, the ATVs were to be classified under the sub heading 8701 90 90 pursuant to the characteristics identified in the Regulation.

The ECJ’s Case C-15/05 Kawasaki decision did not decide the point at issue before this Tribunal: it left open the question of the categorisation of ATVs for the purposes of  CN 8701 90 90 and was concerned largely with engine power and not with any other distinguishing features. Any doubt created by the Kawasaki decision has been clarified by the Regulation. No reference to the ECJ was required in this case.

Click here to view the full Honda Motor Europe v HMRC judgment

The Supreme Court today gave judgment in an appeal brought by ClientEarth against Defra concerning the breach of air quality limits for nitrogen dioxide in Greater London and other zones in the UK. ClientEarth appealed against the Court of Appeal’s decision in May last year to refuse judicial review of the Government’s plans to improve air quality. The lobbying organisation says that under the EU’s Air Quality Directive, the Government should be forced to provide the European Commission with plans for reducing nitrogen dioxide levels by 1 January 2015 in 17 regions of the UK. Defra had previously been successful in arguing that it is not required to produce such plans under the terms of the Directive where compliance with the EU levels could not be achieved by 2015. The Supreme Court held that case raised “difficult issues of European law”, particularly on the interpretation of the Government’s  obligations under the Air Quality Directive, and that it was therefore required to make a reference to the Court of Justice of the EU (“CJEU”). The parties have been given 14 days to make submissions on the precise terms of the questions to be referred.

Kassie Smith QC acted for Defra in the Supreme Court.

To read the Supreme Court judgment, please click here.

The European Court delivered a judgment today dismissing the proceedings brought
by the Commission against the UK in which it challenged the UK’s legislation on
VAT Grouping. This judgment will be welcomed by all large taxpayers in the UK.

Click here to read the full European Commission v UK judgment

Melanie Hall comments in VAT Groups Sigh Of Relief case note

Monckton Chambers is pleased to announce Vivien Rose will be appointed Justice of the High Court with effect from 13 May 2013.

Vivien Rose is the current chair of the Competition Appeal Tribunal (CAT) and has a wealth of expertise in competition and public law. She was called to the bar in 1984 upon which she took up tenancy at Monckton.

In 1995 she left private practice and joined the Government Legal Service, working for several years in HM Treasury advising on financial services regulation, at the Ministry of Defence advising on international humanitarian law, and in the Legal Services Office of the House of Commons. She joined the CAT as chairman in 2005.

She is one of four newly appointed High Court Judges. To read full coverage of the new appointments in The Lawyer, please click here.

Members and staff of Monckton Chambers warmly congratulate Vivien on her success.