Case Law Corner

Colaingrove Limited


Zero-rating for additional items supplied in conjunction with caravan
A holiday park operator sold caravans. Customers were also able to purchase a veranda at the same time which could be bolted onto the caravan. When the veranda was sold separately the appellant always accounted for VAT @ 20 % on the sale of the veranda. However, the appellant contested that the supply of a veranda with a caravan could be zero-rated as a single supply - following the principles laid down in the "Card Protection Plan" judgment.The First Tier Tribunal had rejected the appellant's case but the Upper Tier allowed the appeal noting that "there was nothing in Group 9 of Sch 8 to the Act to exclude a veranda from the scope of zero-rating by reason of being part of a single supply of which the principal supply was a caravan". - See more at:

National Exhibition Centre Limited


Taxpayer sought recovery of overpaid VAT on booking fees charged to customers for purchase of concert tickets.  Taxpayer claimed booking fees constituted an exempt supply of card handling services.

Revenue and Customs Commissioners refusing to repay VAT on basis that supply being standard-rated.

You might have imagined that HMRC would repay the taxpayer following its defeats in the very similar cases of Bookit & Scottish Exhibition Centre  Ltd.  Alas no and whilst both the FTT and Upper Tier have now found in favour of the taxpayer the issue of whether such services can be exempt will now be heard by the CJEU.
Watch this space!
Astral Construction Ltd
The Upper Tier rejected HMRC's appeal in a case concerning the zero-rating of a newly constructed nursing home on the site of a former church.


HMRC's objections, perhaps understandably, were
founded on the basis that the  development incorporated the original church as a feature of the scheme.  As such, HMRC's view was that the development comprised the extension or conversion of an existing building rather than the construction of a new building.


The Upper Tier, upheld that FTT judgment, considering "the nursing home, had been so different from the existing building that it could not be said to constitute an enlargement of or extension to the church".


Willant Trust


The First Tier Tribunal found that because clients were restricted in how they could use the hall (e.g. they had to use a specified caterer) they were not able to occupy the hall 'as owners'.


As such the supply could not be one of the right over land.  Instead clients received a taxable supply of "wedding services".


Is this the end for the exempt venue let?  We still think that with careful planning savings can be delivered. 


If you need to discuss please call us. 

February 2015
A warm welcome to all our readers to 2015's first edition of the eye.  One big change already underway this year is the introduction of an EU scheme to simplify VAT accounting on e-services supplied to customers in other member states. - the Mini One Stop Shop (MOSS) went live on 1 January. 
Please also take a look at Case Law Corner which has an interesting selection of cases illustrating the familiar VAT issue of package supplies - i.e. whether VAT should be charged at a single rate or on a component by component basis.
 For further details click here
Mini One Stop Shop (MOSS)

MOSS is a simplification measure for businesses supplying e-services to non-business/private consumers.


With effect from 1 January, changes to the Place of Supply rules mean that such services are taxable in the EU country of consumption with the requirement for suppliers to register for VAT in that country.


MOSS allows businesses the option of declaring VAT due in other member states via a single online portal rather than having to register for VAT in each member state.


A welcome idea in theory but it is to be expected that there will be some teething problems in the roll-out.


Full details can be found on HMRC's website:


Click here for details     
Civil Penalties - Consultation
Red warning stamp on income tax form.  
HMRC have issued a 'Discussion Document' regarding the role of penalties in the current tax system.

There are a number of themes in the consultation including how the application of the existing penalty regime will work in conjunction with plans to expand HMRC's digital services provision.

Of particular interest to taxpayers is the invitation for comments on the issue of proportionality.  Many VAT appeals have been heard in recent years in respect of hefty Default Surcharges for returns and payments presented only a day or so late.

The Consultation is live and requires responses by 11 May 2015.

Bridport & West Dorset - Unjust enrichment 


HMRC are expected to issue further guidance regarding the payment and processing of claims submitted by Members' Golf Clubs for VAT overpaid on Green Fees.


Whilst the argument was won in principle, HMRC have invoked the defence of unjust enrichment to prevent full payment of claims.


Unjust enrichment applies in cases where VAT was charged incorrectly on a supply but that tax has been passed on to the customer as opposed to being absorbed by the supplier.


Claims will be repaid although it is likely they will be reduced to account for the effects of unjust enrichment.


Value Added Tax (Sport) Order 2014

This order amends the VAT Act with effect from 1 January 2015 to give effect to HMRC's change of policy following the CJEU judgment in Bridport & West Dorset Golf Club. This will ensure that supplies of sporting services made to non-members as well as members of non-profit making sports clubs can qualify to be treated as exempt from VAT.


 VAT Nuggets
Distance Selling - Don't get caught out!
Distance Selling involves the sale of goods to private consumers in other EU territories.

Ordinarily, a UK supplier would account for UK VAT on these supplies.  However, once sales exceed given thresholds in EU member states that UK supplier is required to register and account for VAT in that member state.  

Registration thresholds vary from territory to territory but are as low as €35,000 in some member states.

Many online sellers operate in ignorance of these rules and often only discover their liability to register after they have received demands from an overseas tax authority - often with accompanying late registration penalties.

A Matter of Policy - Wedding Venues?

Ordinarily, the supply of a right over land is a supply which is exempt from VAT.  Increasingly HMRC's view seems to be that where land is one component in a package of supplies that the land cannot be the predominant element and that the transaction becomes something other than the supply of a right over land.


Wedding venues are a case in point, HMRC's policy is seemingly that the supply of a wedding venue can never be exempt from VAT when supplied with other services. 


Compare this with HMRC's stipulation that the supply of a room in an hotel for a conference can be exempt even when accompanied by taxable supplies of refreshments.


Why is there such inconsistency for such similar supplies?


If you need to discuss any of the above items please contact Nick or Alan.