Revenue & Customs Brief 03/12

VAT Tribunal decision in Paymex Limited v HMRC

Revenue & Customs Brief 35/11 published on 20 September 2011, dealt with the insolvency implications of the VAT Tribunal decision in the case of Paymex Limited, as we understood them at that time.

HM Revenue & Customs (HMRC) has subsequently undertaken a review of all insolvency processes in light of the Paymex ruling, to provide certainty to the insolvency profession as to where the exemption applies. Following completion of this review, it is HMRC’s view that the VAT exemption arising from the Paymex ruling applies to:

  • Individual voluntary arrangements
  • Company voluntary arrangements
  • Partnership voluntary arrangements
  • Protected trust deeds (applicable only in Scotland)

Insolvency practitioner services in all other insolvency processes remain liable for VAT at the standard rate.

Issued 29 February 2012