Victor Cramer, a partner in our Tax Litigation and Investigations team speaks to the Tax Journal about recent tax cases that have caught his eye, what’s keeping him busy, changes he would like to make to tax law and his thoughts on future trends in tax litigation.

Prior to joining Stewarts, Victor spent 11 years in the tax litigation group of a big four accountancy firm, primarily focusing on VAT and indirect taxation. He has led cases at all levels, including the CJEU, and has successfully acted as an advocate in the tax tribunal.


What’s keeping you busy at work?

As an indirect tax specialist, I am lucky. I get to work on all the glamourous taxes, and I have a relatively broad practice. On my desk, at the moment there is a mix of insurance premium tax advice, a review of SDLT advice, a selection of landfill tax and Scottish landfill tax disputes, a series of VAT liability disputes, and a gaming duty issue. I’m also about to undertake UK Customs Academy training, because of Brexit.


If you could make one change to tax, what would it be?

Can I choose two? I would abolish stamp duty on primary principle residences. It acts as a  block on mobility, social and geographic. My second would be a well designed, hypothecated, carbon tax. The revenue could fund green initiatives as well as finance or grants for things like net-zero home renovations. We need to make our housing stock fit for the future, but the costs are prohibitive for many.


What do you know now that you wish you’d known at the start of your career?

Three things. Firstly, speak up, but not at the expense of drowning out other voices. Secondly,  be strategic – both about individual assignments and your career. Thirdly, find a mentor. Not a sponsor, you don’t want to be someone’s pet, you want someone who will help you grow and help you hold yourself to account.


Are there any new rules that are causing a particular problem?

It’s hard to answer this without just shouting Brexit and wandering off grumbling incoherently.  In all seriousness, though, the Trade and Cooperation Agreement arrived on 24 December, a week before it came into effect. I really think the end of the implementation period needed an implementation period.


Has a recent tax case caught your eye?

Yes, the Upper Tribunal decision HMRC v Cheshire Centre for Independent Living [2020] UKUT 275 (TCC), a VAT case. The case is an unusual example of a losing party successfully obtaining its costs from HMRC, but that is not what caught my attention. CCIL promoted the independent living of disabled persons. Its services included payroll services provided to disabled people who used funding to employ a carer. HMRC argued that the care was provided by individuals who were not VAT registered, and the care service was therefore not exempt.

HMRC relied on the Brockenhurst College and Ygeia cases. As CCIL conceded, the point was not fully argued, but I think HMRC’s argument is wrong. The exemptions in article 132(1) are set out in two different formats. The formats are either ‘the supply of X and goods and services closely connected to X’ or ‘the supply of goods and services closely connected to X’.

In my view, the difference is material. In the first format, it is clear that there will be a principal supply to which certain other activities may be exempt if closely connected. In the second format, there is an activity, which may or may not be an activity which VAT recognises. Certain goods or services which are closely connected to that activity can be exempt from VAT.

The cases HMRC relied on both deal with the first format. CCIL relied on an exemption which used the second format. I can think of at least one CJEU decision on an exemption with the second format where the court concluded that a ‘closely connected’ supply was exempt despite being unable to identify an exempt principal supply. The consequence of the decision is that disabled people are now bearing a VAT burden on payroll services for their carers. I don’t think that is the intention of the exemption, and it is not an intellectually necessary result.


You might not know this about me…

I am completely and utterly terrified of heights. I mean gibbering in the corner, crying scared of them. A certain social media website keeps putting videos on my feed of someone walking along the snow-covered crest of some mountain ridge somewhere, and I can’t even watch them without getting uncomfortable.


This interview was first published in Tax Journal, 10 February 2021. The original can be found here.




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