SSP loses exemption after HM Customs & Excise reverses decision
Software Solutions Partners (SSP) is to fight a ruling by HM Customs and Excise that stripped it of a VAT exemption. The bill could be £1m.
The software house said it had already informed HM Customs and Excise and its business partners that it would start the 18-month tribunal process to win back the tax break, which it was granted in October last year.
SSP chief executive David Rasche said: "The view of our advisers at Deloitte and the legal opinion we sought was that we are in the right, as was the original ruling that granted the exemption.
"What we don't know is the exact detail of why it [HM Customs & Excise] changed its mind."
Rasche confirmed that HM Customs and Excise was seeking up to £1m of uncollected VAT. The exemption is understood to have been granted because transactional fees and software development were considered 'insurance related services' under the VAT Act 1994.
But a change of thinking meant SSP's services were recategorised as 'supplies of software' and subject to VAT.
Rasche said: "We invested hundreds of thousands of pounds in consultants' fees to achieve the exemption. It was a ground-breaking move. However since then there have been a lot of changes in the tax climate."
HM Customs and Excise declined to comment.
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