The store introduced a system whereby when a customer paid by credit card, the charges made to them for card handling were expressed as a separate amount on the receipt. The store then said that VAT was payable only on the net amount allocated to the goods purchased.
Held: The till slip was insufficent to establish in the customer’s mind that he was taking two services, or to create a second contract. The store’s claim failed, and the Commissioners’ appeal succeeded. Given this analysis the question of abuse did not arise.
Judges:
Lord Justice Mummery Lord Justice Mance Sir Peter Gibson
Citations:
[2005] EWCA Civ 892, Times 26-Jul-2005
Links:
Jurisdiction:
England and Wales
Citing:
Cited – Apple and Pear Development Council v Commissioners of Customs and Excise ECJ 8-Mar-1988
Consideration means ‘everything received in return for the supply of services or the provision of services’. . .
Cited – Telewest Communications Plc Telewest (Publications) Limited v Commissioners of Customs and Excise CA 10-Feb-2005
The taxpayers sold cable services which were liable to VAT through 28 subsidiaries, and supplied by a third party as part of the same service a listings magazine. They sought exemption from VAT for that part of the consideration related to the . .
Cited – Trafalgar Tours Ltd v Customs and Excise Commissioners CA 1990
United Kingdom legislation is to be construed so far as possible so as to give effect to the purpose(s) of the European directives. As to the meaining of ‘consideration’ under the Sixth Directive: ‘Having regard to art 11A(1)(a) of the Sixth . .
Appeal from – Debenhams Retail Plc v The Commissioners of Customs and Excise ChD 1-Jul-2004
. .
Cited – Halifax plc v Commissioners of Customs and Excise VDT 2001
. .
Cited – Customs and Excise Commissioners v Reed Personal Services Ltd 1995
The court consideerd the basic nature of Value Added Tax (VAT): ‘First, . . .. the concept of supply for the purposes of VAT is not identical with that of contractual obligation. Secondly, in consequence, it is perfectly possible that although the . .
Cited – Kuwait Petroleum (GB) Ltd v Commissioners of Customs and Excise ECJ 27-Apr-1999
‘Items’ described as gifts’ which Kuwait Petroleum exchanged under a petrol promotion scheme for vouchers received by customers purchasing petrol were issued ‘free of charge’. The purchase of petrol and the exchange of vouchers for gifts were . .
Cited – Tesco Plc v Customs and Excise Commissioners CA 14-Oct-2003
The taxpayer had a loyalty scheme under which they issued vouchers to shoppers who had purchased goods to a certain value. They sought to deduct the sums when accounting for VAT.
Held: Upon earning 150 loyalty points in a quarter, vouchers . .
Cited – Auto Lease Holland BV v Bundesamt fur Finanzen ECJ 6-Feb-2003
The court identified the need to give an autonomous meaning to the phrase ‘supply of goods’ in article 5(1) of the Sixth Directive as follows: ‘ . . .. it is clear from the wording of that provision that ‘supply of goods’ does not refer to the . .
Cited – Staatsecretaris Van Financien v Cooperatieve Aardappelenbewaarplaats ECJ 5-Feb-1981
(The Dutch Potato case) A farmers’ cooperative owned a refrigerated potato store. During 1975 and 1976 it came to be unnecessary, because it was planning to sell the store, to levy the usual storage charges on its members. Dutch tax officials . .
Cited – Mirror Group plc v Commissioners of Customs and Excise, Cantor Fitzgerald International v Same ECJ 9-Oct-2001
A potential lessee who did not have an interest in immovable property agreed to take a lease in return for money paid by the landlord. The transaction was not exempt from value-added tax under article 13(B)(b) as ‘the leasing or letting of immovable . .
Cited – Yorkshire Co-operatives Ltd v Commissioners of Customs and Excise ECJ 16-Jan-2003
The retailer accepted coupons issued through newspapers against part of the purchase price of goods. The discount was recovered from the manufacturers on surrender of the coupons. They paid VAT on the discounted value, relying upon Gibbs. The . .
Cited – Town and County Factors Ltd v Customs and Excise Commissioners ECJ 17-Sep-2002
The necessary link between a supply and any consideration for it need not derive from a relationship enforceable in legal proceedings before VAT is chargeable: ‘All that need be examined is whether the components of reciprocal performance are . .
Cited – Primback Ltd v Commissioners of Customs and Excise ECJ 15-May-2001
A company made arrangements for finance for its customers to purchase products at an apparent zero rate of interest. In fact the finance company deducted an undisclosed commission before forwarding payment to the shop. The shop wanted to pay VAT . .
Cited – Lex Services plc v Her Majestys Commissioners of Customs and Excise HL 4-Dec-2003
When taking a car in part exchange, the company would initially offer the correct market value. If the customer wanted, the company would agree a higher price. When cars were returned, the company at first reclaimed the VAT on the re-purchase price, . .
Cited – Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd CA 12-Nov-1987
Incorporation of Onerous Terms Requires More Care
Photographic transparencies were hired out to the advertising agency defendant. The contract clauses on the delivery note included a fee which was exorbitant for the retention of transparencies beyond the set date.
Held: The plaintiff had not . .
Cited – In re Charge Card Services Ltd ChD 1987
The court discussed the historic availability of set-off in an insolvency: ‘By the turn of the [20th] century, therefore, the authorities showed that debts whose existence and amount were alike contingent at the date of the receiving order, and . .
Cited – Customs and Excise Commissioners v Diner’s Club Ltd CA 1989
Where a payment is made by credit card, some form of underlying contractual scheme will pre-date any individual contract of sale. This may include not merely the contract between the card-holder and card-issuer, but also an arrangement between the . .
Cited – Sa Chaussure Bally v Ministry of Finance Belgium ECJ 20-Sep-1993
The Vatable amount is based on what a purchaser pays ignoring any commissions. . .
Cited – Emsland-Starke GmbH v Hauptzollamt Hamburg-Jonas ECJ 14-Dec-2000
ECJ Articles 9(1), 10(1) and 20(2) to (6) of Regulation No 2730/79 laying down common detailed rules for the application of the system of export refunds on agricultural products, in the version resulting from . .
Cited – Telewest Communications Plc Telewest (Publications) Limited v Commissioners of Customs and Excise CA 10-Feb-2005
The taxpayers sold cable services which were liable to VAT through 28 subsidiaries, and supplied by a third party as part of the same service a listings magazine. They sought exemption from VAT for that part of the consideration related to the . .
Cited – C R Smith Glaziers (Dunfermline) Limited v Commissioners of Customs and Excise HL 20-Feb-2003
The taxpayer sold double glazing, supported by an insured guarantee, for which a charge was made. The additional charge was exempt, but it was contended that the contract should have stated the amount pursuant to Note 5.
Held: The contract . .
Cited – Emsland-Starke GmbH v Hauptzollamt Hamburg-Jonas ECJ 14-Dec-2000
ECJ Articles 9(1), 10(1) and 20(2) to (6) of Regulation No 2730/79 laying down common detailed rules for the application of the system of export refunds on agricultural products, in the version resulting from . .
Lists of cited by and citing cases may be incomplete.
VAT
Updated: 01 July 2022; Ref: scu.228797