British Eventing Limited v Commissioners for Her Majesty's Revenue and Customs
Decision date: 17 August 2010
Neutral citation: [2010] UKFTT 382 (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 case concerns whether British Eventing Ltd (the assignor) could recover VAT paid on a reverse premium when HMRC refused an option to tax, and whether the Tribunal could consider related amendments. The Tribunal held the assignor did not make a taxable supply on assignment for £10, that the reverse premium was consideration for a taxable supply by the assignee (TEL), and that the VAT on the reverse premium was not attributable to the assignment but was an overhead recoverable by the Appellant under its partial‑exemption method. The Appellant could not pursue a s80 repayment claim because repayment rights belong to the person who paid or accounted for the output tax (TEL).
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
Where an assignment involves a nominal transfer price but an actual reverse premium paid to induce an assignee to accept onerous obligations, the nominal sum is not consideration for a supply by the transferor; instead the reverse premium is consideration for the assignee’s supply, and VAT on such payments is within the VAT system and attributable to the party receiving/charging for that supply. Repayment rights under s80 are confined to the person who paid or accounted for the output tax.
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 commented that HMRC’s discretion under Schedule 10(3)(9) must be exercised based on correct legal attribution of input tax and that HMRC cannot lawfully agree an attribution contrary to law; and that fiscal neutrality does not require consideration of the purchaser/assignee’s VAT position when deciding an assignor’s option to tax under that provision.