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Avoidance scheme
Following the High Court's decision in favour of the claimant in R (on the application of IDT Card Services Ireland Ltd) v CCE Customs have appealed to the Court of Appeal.
The issue in this case is the correct application of the law to a scheme used by IDT to reduce the amount of VAT payable to Customs. The scheme involves phone cards issued from Ireland and aims to avoid charging any VAT when the cards are issued sold or redeemed for telecommunications services.
Customs' view remains that the scheme is tax avoidance and does not achieve in law what it sets out to do. Business Brief 29/2003 fully sets out Customs' view that when phone cards are supplied to a UK distributor by an issuer in another member state operating a scheme such as IDT's UK VAT is due on their onward...
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