Procurement International Limited v The Commissioners for HMRC
Decision date: 24 October 2024
Neutral citation: [2024] UKFTT 949 (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 Procurement International Limited’s supplies of goods, fulfilled for reward programme operators (RPOs) and shipped by carriers under terms arranged and paid for by the appellant, qualified as direct exports and so were zero‑rated. The First-tier Tribunal found the supplies were transfers of whole property constituting single composite supplies of delivered goods, with the transportation properly ascribed to the appellant’s supply. Consequently the goods were removed from the UK as part of the appellant’s supply and the zero‑rating assessments were overturned.
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 a supplier arranges, contracts for and pays for the carriage of goods to an overseas recipient and delivery is an inseparable part of the contractual supply, the movement of the goods may be ascribed to that supplier’s supply for VAT zero‑rating; the contractual and economic reality (including allocation of risk, who appoints the carrier, and applicable terms) determines whether the supply involves removal by the supplier rather than a subsequent supply by the purchaser.
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 observed that invoice timing does not determine the place of supply (the tax point may be deferred by invoice rules but that does not relocate the place of supply). It also commented that large hearing bundles often contain irrelevant material and parties should signpost relied documents.