Who supplied the services?

This is the latest episode in a long-running VAT dispute. Ocean ran a loan broking service and incurred significant advertising costs in promoting its business.

Because of a concern that competitors were not suffering the same VAT cost on their advertising spend Ocean implemented a new structure under which it set up a wholly owned company in Jersey (Alabaster) to carry out the loan broking service. It had no place of business or staff in the UK so it entered into an agreement with Ocean under which Ocean provided the necessary services. The First-tier Tribunal decided at an earlier hearing that it was Alabaster not Ocean which supplied the service and received the supply of advertising and that the arrangement was not abusive under the Sixth Directive. HMRC appealed and after a referral to the Court of Justice of the EU the Upper Tribunal dismissed its...