‘increase in consideration’ means an increase in the consideration due on a supply made by a taxable person which is evidenced by a credit or debit note or any other document having the same effect and ‘decrease in consideration’ is to be interpreted accordingly; ‘negative entry’ means an amount entered into the VAT account as a negative amount; …’
‘1. Supplier will take over all the Students that are currently studying at SAM and ensure that every Student will be provided with the educational training Course material, lectures, examination centre, study facilities, study premises, in order that they may complete the course they had enrolled for at SAM.’ 2. Supplier will not ask or request or demand that any student of SAM pay any Additional fees to them other than the Fees that they were or had to pay SAM in the future or fees outstanding, for the current courses they have enrolled with SAM. 3. Supplier will consider taking over staff that have resigned at SAM. Supplier will make arrangements with self employed Lecturers at SAM. 4. Supplier will pay£65,000 by latest Thursday 27 September in cleared funds to SAM.’
‘Section 80(3) of [VATA] provides that HMRC shall not be liable to pay a claim if to do so would unjustly enrich the claimant. It might be argued that it is the students, and not LSAM, that have the economic burden of the tax, and therefore to pay the claim would unjustly enrich LSAM.’
‘Our claim is based on theVAT Regulations 1995 Section 38(6). … This has nothing to do with Section 80(3) or an unjust enrichment claim. VAT output has been declared. Service was not provided. A credit note needs to be raised.’
‘4. Enrolment for the course, together with the payment of deposit/full fee, creates a binding agreement, for the duration of the course and is non refundable under any circumstances especially when VISA are refused.’ ‘9. If the school has provided you with UKBA VISA letters / CAS then please note that FULL FEES will be payable whether the visa is refused or you decide to go to another college, ….’ ‘10. Once letters of course confirmation have been issued for confirming full-time status there is no refund what so ever even if you have applied for a change to your student visa status to any other statuses …’ (2) Under ‘Refund Policy’, it is stated, inter alia: ‘3. We also reserve the right to suspend or dismiss any student without refund of fees in the event of misconduct or unsatisfactory attendance/progress.’
‘2. Failure to attend 2 consecutive weeks (without notice) will result in London SAM notifying the UKBA, dismissal from the college and forfeiture of any remaining fees. 3. We are required by law to record your attendance and supply any or all details when requested by Home Office or any other Law Enforcement agency in the UK.’
‘In respect of the supply of goods or services, […] the taxable amount shall include everything which constitutes consideration obtained or to be obtained by the supplier, in return for the supply, from the customer or a third party, including subsidies directly linked to the price of the supply.’
‘25. Next, it must be borne in mind that it is settled law that the provision [i.e. Art11A(1)(a) of the Sixth VAT Directive, predecessor of Art 73 of the PVD] must be interpreted as meaning that the taxable amount for a supply of services is represented by the consideration actually received for that supply …’
‘ … even though in [International Bingo] the Court’s analysis concerned the interpretation of Article 73 of the VAT Directive, the interpretation that the judgment provided of the notion of “consideration” laid down in that provision may apply in respect of the words “where the price is reduced” used in Article 90 of the directive, given that both [Article 90] and Article 73 of the directive address the components of the taxable amount.’
‘In that regard, it suffices to state that the wording of Article 11C(1) of the Sixth Directive [i.e. predecessor of Art 90] does not presuppose such a subsequent modification of the contractual relations in order for it to be applicable. In principle, it requires the Member States to reduce the taxable amount whenever, after a transaction has been concluded, part or all of the consideration has not been received by the taxable person … there is no indication that in its judgment in Elida Gibbs … the Court wished to restrict the scope of application of that provision. On the contrary, it is apparent from the facts of the Elida Gibbs case that there had been no modification of the contractual relations. Nevertheless, the court held that Art 11C(1) of the Sixth Directive was applicable.’
‘However, at the time when it credits the amount in question to the agent’s account established in its books, Freemans has not yet actually paid the AOP discount to the agent. Where the agent does not use that amount, Freemans disposes of it by adding it to its profit and loss account. It is only when the customer uses the AOP discount that the discount is actually paid, so that as Art 11C(1) of the Sixth Directive provides, the taxable amount for the corresponding purchase must be reduced accordingly under conditions to be determined by the member states.’
‘… the CJEU does not determine that, where consideration has been obtained, a contractual obligation to repay all or part of that consideration is necessarily insufficient to meet the requirements of Article 90. The CJEU does not draw any distinction of principle between “contractual rights” on the one hand and “actual payments” on the other. Rather, the CJEU concludes that because an agent could still lose the amounts credited to her account (for example if she did not claim them in time) there is no payment of the AOP discount to her at that point. There is no express analysis in paragraph [35] of whether an agent acquired any contractual right to a credit before the point at which she used that credit. That perhaps suggests that a contractual right in itself would not be enough to engage Article 90 since, if it were, the CJEU might be expected to refer to the precise time when the contractual right came into existence. However, while that offers tangential support for HMRC’s arguments, we do not consider Freemans to be determinative of this point.’
‘(6) Any entry required by the regulation to be made in the VAT account of an insolvent person shall be made in that part of the VAT account which relates to the prescribed accounting period in which the supply was made or received.’
‘[64] It is common ground that Art 11C(1) [i.e. predecessor of Art 90(1)] has direct effect and that a Member State cannot take away the right conferred by that provision by measures which the Member State takes to establish the conditions under which the right is to be enjoyed. Moreover, the derogation which Member States are permitted to make under Art 11C(1) must be objectively justifiable; the same must be applicable to the conditions which the Member States are required to determine the conditions imposed by Member States are concerned with procedure and evidence. They are not permitted to go further than necessary; and any conditions imposed must be justified [and that] they may be imposed to check that the reduction is not fictitious. [65] Here the ‘condition’ imposed by rule 38(1A) is concerned neither with the procedures for making the claim nor with the evidence required to support it. It is a blanket limitation which has the effect of outsing the taxable person’s basic right to be taxed on the consideration received by him and no more. As such, the three year limitation on making the claim by reference to the time when the original supply is made is incompatible with Art 11 generally and GMAC’s rights under Art 11C(1) in particular. Rule 38(1A) has rendered ineffective GMAC’s right to relief. On that basis we think that GMAC is entitled to rely on its Community law rights; and to the extent that the Commissioner’s decision seeks to deny GMAC those rights, the decision is wrong. Our conclusion on the three year limitation issue is therefore in favour of GMAC.’