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UK ends reliance on ECJ VAT case law 2024

Following Brexit, UK’s Retained EU Law Act 2023 ends certain reliance on EU-derived rulings on VAT

The UK will cut certain links to EU VAT derived legislation from 1 January 2024. This is contained within the Retained EU Law Act 2023 (‘the Act’) which, following. This will mean that existing uncertain reliance that may be applied to EU general law principles since Brexit will now rise further with the new Act.

When still inside the EU, the UK was obliged to implement EU VAT Directive and case law via primary legislation (UK VAT Act 1994) and secondary legislation. At the time of Brexit, the Withdrawal Act 2018 confirmed the UK VAT Act to be interpreted with EU case law and general principles of EU law.

Under the new Act, this will end. The UK courts whilst still relying on the UK VAT Act and its EU VAT Directive principles, will be become freer to deviate from retained ECJ case law. The general principles of EU law will no longer be part of UK law and the principles of conforming interpretation will cease to apply. This will bring into question whether past decisions that have relied on those principles remain binding on the tax tribunals.

Example ECJ VAT cases affected by UK’s Retained EU Law Act 2023

  • HMRC v Axa UK plc in which the ECJ  examined the extent to which debt collection activities fall within the VAT exemption in the EU VAT Directive. The ECJ found payment related services falling within the definition of ‘debt collection’ as outlined by the ECJ in the AXA judgment were now liable to VAT at the standard rate. This will no longer be certain from 2024.
  • European Commission v Grand Duchy of Luxembourg – ECJ held that Luxembourg’s VAT cost sharing exemption is contrary to EU law, casting doubt on the UK cost sharing rules. Again, this now becomes less certain.


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