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| VAT offering services taxable http://www.taxi-driver.co.uk/phpBB2/viewtopic.php?f=1&t=2358 |
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| Author: | JD [ Wed Aug 10, 2005 2:37 pm ] |
| Post subject: | VAT offering services taxable |
REVENUE — Value added tax — Supply of goods or services — Unincorporated association set up to enable members to buy services collectively — Members reimbursing association cost of provision — Whether provision taxable supply to members — Value Added Tax Act 1994, ss 5(2), 94(2)(a) Eastbourne Town Radio Cars Association v Customs and Excise Commissioners HL: Lord Slynn of Hadley, Lord Hoffmann, Lord Cooke of Thorndon, Lord Hobhouse of Woodborough and Lord Scott of Foscote: 4 April 2001 -------------------------------------------------------------------------------- An unincorporated association set up to provide office staff and services for its members' use and which obtained from them the full cost of that provision thereby made supplies to its members for the purposes of VAT even though its constitution stated that it was acting only as paying agent for the members' own collective employment of the staff. The House of Lords so held in dismissing an appeal by Eastbourne Town Radio Cars Association from the decision of the Court of Appeal (Simon Brown, Swinton Thomas and Potter LJJ) [1998] STC 669 allowing an appeal by the Customs and Excise Commissioners from the decision of Turner J [1996] STC 1469 allowing the association's appeal from a decision of the VAT Tribunal refusing its request to deregister for VAT. The association provided, on a non-profit-making basis, a taxi booking and administration service for its members, self-employed private hire drivers. Its rules provided for the management of the association to be vested in a committee which had power to employ staff. It was registered for VAT but in 1994 it revised its constitution so that its objects were no longer to provide services and staff to the members but to act as an administrative intermediary for the employment by the members of the staff and to facilitate the supply by third parties to members as joint principals of the use of telephone equipment and other services. The association then sought to deregister on the ground that it was no longer making taxable supplies. LORD SLYNN OF HADLEY said that the payments by each member were consideration for what was done by the association in engaging staff (whether as employees of the association or the members) and providing the other services on the terms of the association's constitution. There was therefore the provision by an association for consideration of facilities to its members within s 94(2)(a) of the Value Added Tax Act 1994. It thus was deemed to be the carrying on of a business by the association. In the course of that business it made supplies of services to its members within s 5(2) of the Act and since that supply was not an exempt supply it was a taxable supply within s 4(2) of the Act. Since the quantity of such supplies exceeded the threshold figure for the payment of VAT the association was required to be registered; it was therefore a taxable person. Accordingly there was a taxable supply made by a taxable person in the course or furtherance of a business carried on by the association within s 4(1). VAT was chargeable. LORD HOFFMANN delivered a concurring opinion, and LORD COOKE OF THORNDON, LORD HOBHOUSE OF WOODBOROUGH and LORD SCOTT OF FOSCOTE agreed with both. |
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