Opinions will vary as to the most significant VAT cases over the past 40 years, writes VAT Advice's Les Howard.
I did think of RSA’s ‘fiscal theme park,’ and Mr A’s attempt to have his tax avoidance case heard in private so people would not know who he was (I’m told he no longer presents on BBC Radio, so everyone knows who he is!).
In Blackpool Pleasure Beach Co, a Big Dipper was held not to be transport; I am not sure it is pleasure either! I also recall one of my own cases (Philip Charles Leisure) which led to the widening of the margin scheme to include quad bikes; HMRC argued that ‘includes’ meant ‘did not include.’ Now, the margin scheme does ‘include’ many more items, beyond cars and motorbikes. Result!
But now the more serious stuff:
Card Protection Plan Ltd - a VAT Tribunal case that eventually found its way to the European Court, after 10 years! The case quite helpfully provided an early template for approaching supplies which consist of a basket of goods and services. Lots of subsequent cases have tweaked the principles, of course, but CPP remains crucial in understanding this interesting area of VAT Law.
Lord Fisher – What is a business? Lord Fisher and his pheasant shoot is an oft-quoted case. The ‘six indicia’ referred to in the case have been frequently quoted since. Nowadays, we are able to use one indicia to ‘trump’ all the others, which is something of a double-edged sword, as well as a mis-quote from Lord of the Rings! And, where else can you use the word ‘indicia?’
Jo-Ann Neal – Ignorance is no excuse! An early ‘reasonable excuse’ case, which was heard by the QB, dealing with a failure to register for VAT. How the fashion model was convinced to pursue the matter beyond tribunal, I don’t know! The QB upheld the Tribunal’s decision; “VAT is well enough established in our daily commerce that anyone, however inexperienced, ought to recognise the need to become acquainted with its basic requirements when embarking upon a career.” Quite right! The taxpayer has a responsibility to make sure he/she fulfils all relevant legislation, and help to keep people like me in business!
Van Boeckel – The perennial problem of poor records leads to all sorts of issues for HMRC and for advisers. This early case established that HMRC officers should not be required to do the work of the taxpayer in seeking to quantify any VAT liability. Later cases did weaken taxpayers’ arguments further, as HMRC could base their calculation on a very small sample of data. However, the taxpayer should ensure his record-keeping is accurate and comprehensive.
BLP – There seem to be many more partial exemption and business:non-business cases around than a few years ago. BLP provides an essential guide to the way input tax is attributed in such cases, but may be helpful or not, depending on the circumstances. The case defined the ‘direct and immediate’ approach to attributing input tax, which does give some certainty. HMRC now has online guidance that fleshes this out as well.