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BlackRock's legal bid threatened by no-deal Brexit

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BlackRock's legal bid threatened by no-deal Brexit

BlackRock Inc.'s legal bid to lower taxes for customers of its artificial intelligence-powered unit, Aladdin, could be derailed if the U.K. exits the European Union without an agreement on the terms of their future relationship, Bloomberg Tax reported Jan. 7.

BlackRock wants a favorable court ruling that would allow the apportionment of tax-exempt and taxable usage of Aladdin. However, companies are required to pay value-added tax when they purchase a service and not how they use it, according to the report.

Her Majesty's Revenue and Customs suggested that a service should be sold in separate transactions instead of having the government publish a separate guidance regarding services that are bought once but are used in different ways, including ways that are tax-exempt.

With U.K.'s scheduled exit on March 29 and Prime Minister Theresa May facing fierce opposition to her Brexit deal, a ruling will not likely come until after U.K. exits the single market. In this event, British courts would not need to follow the EU's decision on the case, the report cited tax practitioners.