Queen Mary University of London v Commissioners for Her Majesty's Revenue and Customs
Decision date: 7 April 2011
Neutral citation: [2011] UKFTT 229 (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 concerned linked agreements under which LPIC took title to and provided permanently installed specialist plant and machinery for the Blizard Building and charged QMC periodic rent. The tribunal held the linked transactions formed a single indivisible economic supply of the use of permanently installed plant and machinery rather than separable supplies of land and items of plant. The single supply was not zero-rated under Schedule 8 and was standard-rated for VAT. The appeal was dismissed.
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 elements of a transaction are so closely linked and are received and used together by the typical customer, they constitute a single economic supply that should not be artificially split for VAT purposes; a composite transaction that is, in substance, the leasing/financing of permanently installed plant and machinery falls outside the land exemption and is taxable, and zero-rating exceptions do not permit splitting an otherwise taxable single supply unless the statutory framework expressly allows it.
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 characterising a transaction broadly as finance may be insufficient where continued use depends on rental payments and substantive rights, and noted that domestic law does not permit apportionment of a single supply of land under Schedule 9 except where expressly provided (e.g. for game/fish).