Arts group in VAT battle

A VAT battle between Liverpool Institute for Performing Arts (LIPA) and the Commissioners for Customs and Excise is under consideration by the House of Lords. The Lords are deciding whether to grant leave for an appeal by LIPA against an Appeal Court ruling in March this year that advertising and publicity services supplied to LIPA by a German company should not be treated as if they had been made in Germany, but should be liable to VAT in the UK in the usual way. In its March decision the Appeal Court overturned a 1998 High Court ruling by Mr Justice Carnwath that under regulation 30 and 32 of the Value Added Tax (General Regulations) 1985, the services in question should have been treated as "out of country supplies".