The VAT review for April 2022

HM Treasury is consulting on the possibility of introducing an online sales tax to rebalance taxation in the retail sector. In Finanzamt R v W-GmbH (Case C-98/21), the advocate general has opined that input VAT incurred by a holding company in relation to a contribution of services to a subsidiary free of charge should not be recoverable. In Suzlon Wind Energy Portugal v Autoridade Tribunataria e Aduaneira (Case C-605/20), the CJEU has held that the beneficiary of a warranty made supplies to the warrantor in agreeing to carry out necessary repairs for payment. Finally, HMRC has published new guidance on how businesses should treat supplies whilst waiting for confirmation of a change in VAT grouping status from HMRC and on the limitations placed on end customer claims for overpaid VAT against HMRC following implementation of the EU (Withdrawal) Act 2018.