Priti Lee v Commissioners for Her Majesty's Revenue and Customs
Decision date: 28 October 2010
Neutral citation: [2010] UKFTT 520 (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 concerns whether Mrs Lee was carrying on a business for VAT purposes when she registered on 1 March 2004, sold land (Kingsley Court) on 31 March 2004 and claimed input tax and interest. The First-tier Tribunal found she was not carrying on a business at the relevant times, upheld HMRC’s cancellation of registration from 1 March 2004, disallowed the input tax claims and assessments, and dismissed the claim for interest. The sale was treated as outside taxable business activity for her VAT entitlement.
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
The Tribunal applied the principle that VAT registration entitlement and input tax recovery require that the person was carrying on a business characterized by continuity, substance and business-like activity; mere aspirations or isolated transactions (including commercially negotiated disposals required by a court order) do not suffice to establish a business for VAT purposes.
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 doubt (without decisive ruling) whether property sold after vesting to compensate a party under a court order fits the usual category where compensation is not treated as consideration for a supply. It also noted that membership of professional bodies or sporadic preparatory acts are weak evidence of carrying on a business.