UT/2024/000002 - [2025] UKUT 00188 (TCC)

JPMorgan Chase Bank NA (‘CBNA’) is a US-regulated bank which, as well as carrying out transactions with its own clients, provides infrastructure and support services to companies via various intra-group agreements throughout the JP Morgan global corporate group. This appeal concerns the VAT treatment of services supplied by CBNA to JP Morgan Securities plc (‘SPLC’), a UK incorporated and regulated entity, used by the group for the purposes of the Markets segment of JPMorgan’s global business (providing clients access to the global financial markets). CBNA and SPLC are members of the same VAT group, CBNA is the representative member of the group. Ordinarily such supplies would be disregarded but because CBNA bought in services from overseas to enable it to make the intra-group supplies the issue that arises in this appeal is over the extent to which the supplies are treated as taxable pursuant to s43(2A) and (2B) of the Value Added Tax Act 1994 in VAT periods 06/13 to 12/20.

In that regard, CBNA’s appeal (which is an appeal against the VAT assessments HMRC made on CBNA), raises three broad issues:

The FTT found in HMRC’s favour that CBNA made a single taxable supply of “support function” services and that that was a standard-rated supply (even if one or more elements of the supply were exempt). It went on to hold that if it was wrong on that, and there were multiple separate supplies in respect of the seven business areas, or a separate supply of Business Delivery Services, those separate supplies would not have been exempt.

It also considered it was not appropriate to dismiss the appeal on the basis of the “Identification Issue” (an argument advanced by HMRC that CBNA had not identified any specific exempt supplies and what consideration for those supplies was given). HMRC advanced this argument in the Respondents’ Notice and the parties addressed us on the issue.

With the permission of the FTT, CBNA appeals arguing the FTT made various errors of law. On the single vs. multiple supply issue it is argued principally that the FTT misapplied the relevant legal principles. On the exemption issue it is argued the FTT misinterpreted the relevant case-law on the scope of the securities exemption and also that the FTT’s conclusions were inconsistent with its own findings. On the classification issue, while CBNA agree that (if contrary to its case) it is found to make a single supply of services that the FTT were correct to have concluded that constituted a taxable standard rated supply, it argues the FTT’s reasoning for so concluding was wrong.