The cost of the delivery of a quantity of new cars from the factory or depot to the purchaser is incidental and ancillary to the supply of the cars themselves, and the VAT on delivery charges was not reclaimable by the purchasing company as Input Tax. The sale of a car and the delivery to the taxpayer’s premises did not constitute two distinct supplies for VAT purposes. All the circumstances must be considered, and looking at the transaction as a matter of commercial reality there was a single contract for a delivered car, and it was artificial to split the various parts of the transaction into different supplies for VAT purposes. The service of delivering the car was incidental or ancillary to the supply of the car, and it was irrelevant that the taxpayer could have made a different arrangement for delivery of the car by a transporter or by collecting the car. (Lord Hope) ‘This seems to me to be a good example of a transaction which involves the supply of both goods and services, which the court had in mind when it referred in [the Card Case] to a service which did not constitute for customers ‘an aim in itself, but a means of better enjoying the principal service supplies.” Referring to Madgett, Lord Hope said the relationship between the supplies of travel services and accommodation must be disproportionate if the transaction was to be regarded as comprising one supply. ‘ . . no single factor will provide the sole test as to whether the supply in question is a distinct and independent supply or is incidental or ancillary to another principal supply.’
Judges:
Lord Hope
Citations:
Gazette 14-Jul-1999, Times 05-Jul-1999, [1999] UKHL 3, [1999] 1 WLR 1376, [1999] AC 1376
Links:
Statutes:
Value Added Tax (Input Tax) Order 1992 (1992 No 3222)
Jurisdiction:
England and Wales
Citing:
Cited – Commissioners of Customs and Excise v Madgett and Baldwin (trading as Howden Court Hotel) ECJ 22-Oct-1998
The court considered the criteria for determining whether the provision to guests by a hotelier of travel services (and in particular transport to and from the hotel and excursions) constituted supply which was ancillary to the supply of . .
Appeal from – Commissioners of Customs and Excise v British Telecommunications Plc CA 18-Mar-1998
The delivery of a quantity of cars is a separate supply from the purchases of the cars themselves and the VAT on the delivery charges is reclaimable as an input. . .
At first instance – Regina v Her Majesty’s Treasury ex parte British Telecommunications Plc Admn 14-Nov-1996
. .
Cited by:
Cited – Commissioners of Customs and Excise v Plantiflor Limited HL 25-Jul-2002
The company charged no VAT on its postage and packaging charged to mail order customers. The company had described it as an advance of the sums to be charged by Parcelforce.
Held: There was no separate contract between the end customer and . .
Cited – College of Estate Management v Commissioners of Customs and Excise ChD 13-Nov-2003
The college appealed a finding that the supply of course manuals to its students was part of its exempt rather than zero-rated supply.
Held: ‘Once it is decided that there is a single supply from an economic view which should not be . .
Cited – College of Estate Management v Commissioners of Customs and Excise CA 11-Aug-2004
When offering courses to distance learning students, the College offered materials for the courses. As part of the course this supply would be exempt, as books, the supply would be zero-rated, but the taxpayer would be able to reclaim its VAT . .
Cited – Beynon and Partners v Customs and Excise HL 25-Nov-2004
The House asked whether the personal administration of a drug such as a vaccine by an NHS doctor to a patient is a taxable supply for the purposes of value added tax. The provision of medical care in the exercise of the medical and paramedical . .
Cited – College of Estate Management v Customs and Excise HL 20-Oct-2005
The college supplied educational services by distance learning. The commissioner sought to argue that printe daterials supplied with the course were ancillary and did not have the same exemption form VAT.
Held: The supplies did benefit from . .
Lists of cited by and citing cases may be incomplete.
VAT, European
Updated: 28 July 2022; Ref: scu.158986