EU Court of Justice upholds Avon £14 million VAT charge

EU Court of Justice upholds Avon £14 million VAT charge

The European Court of Justice has upheld a decision made by the UK to charge Value Added Tax on the sales of a direct sales company’s products to final consumers, even though the representatives that sell the products are not themselves subject to VAT, according to a report published by The Times.

The court ruled that the UK’s decision was ‘appropriate and proportionate to combat tax avoidance’.

Avon bought proceedings before the first-tier tribunal for the refund of overpaid VAT amounting to some £14 million. The direct sales company claimed that the purchase of demonstration products by representatives amounted to business expenditure and therefore the VAT should be deductible.

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