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R (oao Glint Pay Services Ltd) v HMRC [2023] EWHC 1621 (Admin), judgment of 30 June 2023
The Administrative Court (Sir Ross Cranston, sitting as a Judge of the High Court) has dismissed Glint Pay Services’ claim for judicial review of a decision of HM Revenue & Customs that its supplies of gold were not to be treated as zero-rated, rather than exempt, for the purposes of VAT.
Glint makes available to individual members of the public the ability to buy, hold and sell London Bullion Market-accredited gold (see Home | Buy, Save & Spend Physical Gold (glintpay.com)). Glint does this by way of a bespoke app, which operates and interacts with the Mastercard system and which enables clients to buy and sell gold from and to Glint, in the form of fractional/proportional shares of gold bars. The client’s purchases, sales and ownership of gold are recorded in the app. Glint in turn buys and sells gold from and to a member of the London Bullion Market Association (LBMA). At all times, the gold itself remains held securely in the vault of another LBMA member in Zurich.
In the course of Glint’s application for approval of a Partial Exemption Special Method, HMRC indicated that Glint’s sales to clients were exempt supplies of investment gold pursuant to Group 15 of Schedule 9 to the Value Added Tax Act 1994 (“the Investment Gold Exemption”) and that, consequently, Glint could not deduct input tax attributable to those supplies. Glint appealed HMRC’s decision to the First-tier Tribunal, but later withdrew. Consequently, Glint’s supplies were – definitively- exempt as a matter of VAT law. Glint also challenged HMRC’s decision by way of judicial review, claiming it had a legitimate expectation that its supplies would be zero-rated under the VAT Terminal Markets Order 1973 (TMO), based on statements in a 2013 Memorandum of Understanding between HMRC, the LBMA and the London Platinum and Palladium Market (MOU).
The High Court dismissed the claim, holding that the MOU did not state, in terms that were “clear, unambiguous, and devoid of any relevant qualification”, that Glint’s supplies of gold could benefit from any additional carve-out from the Investment Gold Exemption in addition to that provided by the TMO. Glint’s innovative transactions did not fall within the MOU’s terms. Glint accordingly had no legitimate expectation to be taxed otherwise than in accordance with the law.
The High Court further held that it would not have been “conspicuously unfair” or an abuse of power to frustrate any legitimate expectation Glint might have had, and there was no justification to override the public interest in HMRC’s collecting VAT in accordance with what the law clearly provided, especially given that neither Glint nor its advisers had sought HMRC’s clarification as to the possible application of the MOU.
Andrew Macnab acted for HMRC.
Read the Court’s judgment here.