Channel awaits HMRC decision

Channel awaits HMRC decision

ECJ ruling due on 11 May

The industry is waiting with bated breath for the European Court of Justice’s (ECJ) final ruling on HM Revenue and Custom’s (HMRC) controversial Joint and Several Liability strategy.

If the ruling, which is due on 11 May, goes against the strategy it will be the second blow for HMRC this year, after it lost its landmark Bond House case in January (CRN, 16 January).

A group of components and mobile phone traders appealed to the ECJ last year over the strategy, which holds traders jointly and severally liable for unpaid VAT in a supply chain.

Just before Christmas the ECJ Advocate General Poires Maduro revealed his official Opinion, which appeared to be in favour of the appeal, calling for more clarification on whether a person/trader is jointly and severally liable for VAT “subject to the general principles of proportionality and legal certainty”. The ECJ ruling usually follows the Advocate General’s Opinion.

Anthony Elliot-Square, chairman of industry body the Federation of Technological Industries (FTI), which represented the majority of traders in the appeal, was hopeful.

“Although Joint & Several liability is a legal method, we are hoping the ECJ decision will ensure it is implied sensibly and reasonably so it is not victimising innocent traders,” he said.

Alias Dass, partner at law firm Dass Solicitors, which works with the FTI said: “HMRC is under the spotlight and it will hopefully mean they will be more careful over how they apply the provisions of Joint and Several, and will be more selective in the companies they target. We are feeling pretty confident about the ruling.”

HMRC declined to comment as CRN went to press.