Paola Sassi v Her Majesty's Revenue & Customs
Decision date: 23 October 2009
Neutral citation: [2009] UKFTT 280 (TC)
Overall AI summary confidence: medium
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: medium
This appeal concerned whether construction of one flat (Flat B) formed part of a "business" so as to bar a DIY builders VAT refund under s35 VATA. The Tribunal found, on the facts and applying established indicia, that the works were carried out otherwise than in the course or furtherance of any business and allowed the appeal. The Tribunal declined to adjudicate on alleged misleading HMRC advice as beyond its remit.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: medium
When deciding whether activity counts as a "business" for s35 VATA purposes the correct approach is to assess the intrinsic nature of the activities together with their wider context, using factors such as seriousness, regularity, substance, application of business-like principles, predominance of supplies for consideration, and commonality of the taxable supplies; the mere receipt of income or an intention to subsidise costs does not automatically make the activity a business.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The Tribunal expressed sympathy at the apparent unfairness between developer zero-rating and VAT incurred by DIY builders but emphasised it must apply the statute as enacted. It also noted that absence of a profit motive does not preclude business status, while motive alone is insufficient to establish it, so an isolated letting in context may not be a business.