Kingfisher Events Limited (in liquidation) v Commissioners for Her Majesty's Revenue and Customs
Decision date: 25 February 2011
Neutral citation: [2011] UKFTT 140 (TC)
Overall AI summary confidence: medium
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: medium
Kingfisher Events Ltd appealed a VAT assessment (reduced to £28,694.98) and penalty arising from the company claiming full input tax on purchase of the yacht Crackerjack while the yacht was privately used. The FTT found the company had effectively adopted a "deemed supply" (Lennartz) approach, upheld HMRC's assessment except for allowing two days' business use, and applied HMRC's five‑year depreciation basis to value the taxable private use. The deemed supply was treated as a fiscal mechanism and not as an actual supply eligible for place‑of‑supply/zero‑rating.
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 input VAT is deducted on acquisition of an asset that is also used privately, domestic and Directive provisions permit treating the private use as a deemed supply to neutralise the input tax advantage; in the absence of adequate contrary evidence, HMRC's published practice of using a five‑year depreciation period to value that deemed supply is appropriate; and a deemed supply imposed for that fiscal purpose is not to be treated as an actual supply for place‑of‑supply or zero‑rating 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 criticised the appellant's poor and inconsistent record‑keeping and noted that the Sailaway Boat zero‑rating regime was factually distinguishable where its conditions (e.g. 12 months kept outside the UK) are not met; these observations, while influential, are not stated as binding legal rules.
Warning
The evidential material is inconsistent and incomplete (missing log and accounts); findings proceeded on the spreadsheet though the Tribunal expressed low confidence in it. The notes record inconsistent and incomplete evidential material (missing original log and some accounts); findings relied on a reconstructed spreadsheet and the Tribunal expressed low confidence in parts of the evidence.