Diana Bryce t/a The Barn v Her Majesty's Revenue & Customs
Decision date: 6 November 2009
Neutral citation: [2009] UKFTT 298 (TC)
Overall AI summary confidence: high
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: high
This appeal concerned whether charges for children's parties at "The Barn" were a single supply or separable supplies for VAT. The Tribunal held the transaction comprised two supplies: an exempt grant of a licence to occupy the Hall (use of the premises with minor ancillaries) and a standard-rated supply of refreshments, apportioning the party price accordingly. HMRC was ordered to repay the apportioned output tax; parties to agree the sum or relist the appeal.
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: high
Where components of a packaged sale can each serve the customer's economic purpose independently, they may be treated as separate supplies rather than a single indivisible supply. A letting of premises that is a relatively passive activity tied to time and not generating significant added value can amount to an exempt licence to occupy land even if minor ancillary services (e.g. play equipment, basic reception or toilet services) are provided.
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 indicated that the fact a package is offered at a single price does not decide its VAT character; the economic reality test governs the analysis. It also suggested play equipment and minimal reception/toilet services are often ancillary and do not necessarily negate exempt status of a letting.