Supreme Court judgment in Target

The VAT exemption for payment services has kept the courts busy for more than two decades. Codified in VATA 1994 Sch 9 group 5 item 1 its scope has largely been inherited from evolved assimilated case law (as retained Court of Justice of the EU case law is now called). Last year the Supreme Court seized the opportunity to condense that case law into a clear general legal rule (Target v CRC [2023] STC 1770). The mere fact that this rule is clear however does not mean that outcomes under it are necessarily fair or reasonable. This article discusses the potential for the law in the UK to evolve.

Supreme Court judgment in Target

The facts which gave rise to the litigation can be summarised quite briefly. Target operated as a subcontractor of Shawbrook which in turn provided mortgages and loans. It was...