VAT grouping: fixed establishment and protecting the revenue in Barclays

HMRC has sought to test the boundaries of what constitutes a fixed establishment for the purpose of VAT grouping and has argued for a more restrictive EU law approach across a series of cases. In HSBC Electronic Data Processing (Guangdong) Ltd and others v HMRC [2022] STC 367 (HSBC) the Upper Tribunal agreed that the concept should be informed by the case law of the Court of Justice of the European Union (CJEU) on what constitutes a fixed establishment for the purposes of determining the place of supply but noted that the issue was highly fact sensitive.

The latest in this line of cases is Barclays Service Corporation and Barclays Execution Services Ltd (TC9275). Although HMRC prevailed in this instance this article will show that the outlook for UK VAT grouping rules is not as bleak as it may appear.

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