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Husband and wife—whether trading in partnership.

A married woman (W) registered for VAT in 1979 as the proprietor of a shop. The shop did not prove successful, and in 1983 she and her husband also opened a café. They did not register for VAT, on the basis that the café was a separate business and that the takings were below the registration threshold. The Commissioners issued an assessment on W charging tax on the café takings. W appealed, contending that although she was the sole proprietor of the shop, the café was a separate business which she ran in partnership with her husband. The tribunal accepted this contention and allowed her appeal. JM & MC Wade v Isle of Man Finance Board, MAN/85/273 (VTD 2022). (Note. Customs might now have recourse to a direction under VATA 1994, Sch 1 para 2. For cases concerning this provision, see 56.32 et seq. registration.)

A married couple purchased a shop as a going concern in 1988. Their takings were lower than they had anticipated, and in 1991 the husband purchased a car hire business with money he had received on being made redundant from a previous employment. They submitted accounts to the Inland Revenue indicating that both the shop and the car hire business were run as a partnership (with the husband being allocated most of the profit from the car hire business, and the profits and losses of the shop being split equally). The couple did not register for VAT, and in 1998 the Commissioners issued a notice of compulsory registration. The couple appealed, contending that, notwithstanding the accounts which they had submitted to the Inland Revenue, the car hire business was actually being run by the husband as a sole trader while the shop was run by the wife as a sole trader. The tribunal rejected this contention and dismissed the appeal, observing that they had signed the accounts as partners and that 'the accounts are more likely to have shown the true position'. CD & MD Gow, LON/99/28 (VTD 16272).

A married woman was registered for VAT as the proprietor of a public house. She was subsequently declared bankrupt. The Commissioners formed the opinion that the public house had in fact been operated by the woman and her husband in partnership. They issued an amended certificate of registration and an assessment accordingly. The couple appealed, contending that the wife had run the public house as a sole trader with her husband acting as an employee. The tribunal rejected this contention and dismissed the appeal, holding on the evidence that the couple had traded in partnership. R & Mrs J Wilson (t/a Mountain View Hotel), MAN/98/639 (VTD 16404).

A married couple, who traded from a café at a seaside resort, did not register for VAT. Customs issued a retrospective notice of compulsory registration. The couple appealed, contending that the husband was operating the café as a sole trader while the sale of ice creams for consumption off the premises was a separate business, carried on by the wife as a sole trader. The tribunal rejected this contention, holding on the evidence that the couple were trading in partnership. PC & VL Leonidas, [2000] VATDR 207 (VTD 16588). (Note. For other issues in this case, see 50.30 penalties: failure to notify and 58.14 returns.)

The Commissioners discovered that a married couple who carried on a taxi business had not registered for VAT. They issued a notice of compulsory registration. The couple appealed, contending that each of them were trading separately as the proprietor of a different business (with the result that their turnover was below the threshold). The tribunal reviewed the evidence in detail, rejected this contention, and dismissed the appeal. DP & C Hughes, MAN/01/148 (VTD 17700).

A married couple operated a sandwich bar and bistro from the same premises. They did not register for VAT. Customs issued a ruling that the couple were running a single business. The couple appealed, contending that the husband was operating the sandwich bar and the wife was running the bistro as a separate business. The tribunal rejected this contention and dismissed the couple's appeal. D Harris (t/a Fellows Sandwich Bar); Mrs M Harris (t/a Fellows Bistro), MAN/x (VTD 20235).
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17700: DAVID POWER HUGHES AND CAROL HUGHES

Husband and wife - liability to register - taxi operations - one business or two - Burrell case considered - appeal dismissed

TRIBUNAL CENTRE: MANCHESTER
DECISION NUMBER: 17700
APPELLANT: DAVID POWER HUGHES AND CAROL HUGHES

CASE REFERENCE NUMBER: MAN/01/148
RESPONDENTS: THE COMMISSIONERS OF CUSTOMS AND EXCISE

TRIBUNAL CHAIRMAN: R BARLOW

TRIBUNAL MEMBERS: M P KOSTICK, C A ROBERTS

LOCATION: SITTING IN PUBLIC IN MANCHESTER

DATE: 13 MARCH 2002

FOR THE APPELLANTS: MR I T TABERNER

FOR THE RESPONDENTS: MR J CANNAN

RESULT OF THE APPEAL: DISMISSED

Decision

1.

This is the appeal of David Power Hughes and Carol Hughes, who are husband and wife, against the decision of the Commissioners of Customs and Excise compulsorily to register Mr and Mrs Hughes for the purposes of Value Added Tax. That decision was communicated to the Appellants by a letter dated 15 February 2000.

2.

The Appellants were represented by Mr Taberner, VAT Consultant of Vatsystems Partnership. The Respondents were represented by Mr J Cannan, Barrister, instructed by the Customs and Excise solicitor. We are grateful to both representatives for the clear and concise way in which they presented the case.

3.

The Commissioners' decision to register the Appellants from the 1 March 1994 was based upon their contention that Mr and Mrs Hughes were trading together in a single business and as a single legal entity. It was not in dispute between the parties that if the trading in which both Mr Hughes and Mrs Hughes were involved was that of a single legal entity the registration threshold had been exceeded and that the effective date of registration of 1 March 1994 was the appropriate date under Schedule 1 of the Value Added Tax Act 1994. However it was not agreed by Mr and Mrs Hughes that they were involved in trading as a single legal entity and they contended that each of them separately was trading as the proprietor of their own business.

4.

The nature of the business or businesses with which this appeal is concerned is a taxi business or businesses which operated in the following manner. Drivers paid a weekly sum and in return they received the right to use a vehicle and services consisting of the operation of a radio "base station" at premises in Holyhead Anglesey which premises were owned by the Appellants jointly. The taxi vehicles were licensed as Hackney Carriages and therefore could pick up fares from taxi ranks or whilst driving about the area. In addition fares would be obtained by the drivers via the radio station when customers telephoned in to the premises owned by the Appellants and requested that a taxi should pick them up. The allocation of fares to drivers when potential customers telephoned the office was made by the radio operator on the basis that the nearest car would be sent to the potential customer. In addition there was a contract with Ynys Mon Council which the Appellants contend was a contract between Mr Hughes and the Council. Work done in pursuance of that contract was allocated mainly or exclusively to drivers driving vehicles owned by Mr Hughes but as with ordinary fares the drivers received the full amount paid by the Council under that contract in respect of the journeys that the drivers undertook. Invoices were issued to the Council by Mr Hughes but the full amount was then paid by him to the drivers. Thus the only income received by Mr or Mrs Hughes was the weekly amount paid by each of the drivers for the privilege of driving the vehicles and the services ancillary thereto including for example the radio service.

5.

The facts stated in the previous paragraph are not in dispute. However the task of the Tribunal in establishing the facts in this case was made difficult by unfortunate circumstances. Mrs Hughes was too ill to attend the Tribunal. Mr Hughes came to the Tribunal with Mr Taberner but Mr Taberner told us that he, Mr Hughes, was "too nervous" to come into the Tribunal room. We explained to Mr Taberner that it was the normal practice for Appellants to give evidence and that the Appellants would have to prove their case in so far as the facts were not agreed by Customs and Excise. We warned the Appellants through Mr Taberner that their case might be hindered by not giving evidence and indeed after we had heard the evidence of Mrs Haycock, who did give evidence on behalf of the Appellants, we adjourned and asked Mr Taberner to reiterate to Mr Hughes that his case might be harmed if he did not give evidence. However Mr Hughes remained of the opinion that he would not be able to give evidence and did not enter the tribunal room. We can only decide the case upon the evidence that we heard and the undisputed facts, in so far as facts were not disputed. We have however given as much weight as we consider appropriate to the documentary evidence and indeed to the correspondence which was included in the bundles of documents produced by both parties.

6.

Before dealing with the evidence we refer to the legal position.

7.

The decision letter of 15 February 2000 stated that the business would be compulsorily registered for Value Added Tax as a partnership with effect from 1 March 1994. In other correspondence in particular a letter from Mr D R Reid, officer of Customs and Excise, dated 17 February 1999 there had been reference to a partnership between Mr and Mrs Hughes. The Commissioners statement of case also referred to the decision having been based on the conclusion that the Appellants were trading in partnership. In addressing us Mr Cannan pointed out that it is not only in the case of a partnership that two or more individual persons may have to register together for the purposes of Value Added Tax. Paragraph 1 of Schedule 1 to the Value Added Tax Act 1994 which deals with the liability to be registered, refers to a "person who makes taxable supplies", and as Mr Cannan pointed out Schedule 1 of the Interpretation Act 1978 defines a "person" as "including a body of persons corporate or unincorporate". The Commissioners were therefore, according to Mr Cannan, entitled to require the Appellants to register if they were involved in a joint enterprise as a body of persons even if they were not in partnership as such.

8.

Some of the correspondence suggested that Customs and Excise were of the opinion that the registration should be that of a business or more than one business rather than a person or more than one person together. That was clearly incorrect but the decision to register Mr and Mrs Hughes is not necessarily invalidated by that confusion and what we must consider is whether Mr and Mrs Hughes either as a partnership or as a body of persons should have registered from the date contended for by Customs and Excise. We also point out that the actual notice of registration dated 29 March 2000 was addressed to David Power Hughes and Carol Hughes by name, albeit that it also referred to the trading name Star Taxis. The notice therefore was apt to give them notice that they were being compulsorily registered without specifying that they were being registered as a partnership as such. That notice was therefore equally valid whether they were in fact a partnership or a joint venture between a body of persons.

9.

The Commissioners placed reliance upon the case of Richard Burrell v Customs and Excise Commissioners [1997] STC 1413. In particular the following passage from the judgment of Ognall J:

"But I accept for this purpose the way in which the matter is expressed in the helpful skeleton argument on behalf of the Commissioners. They contend that in so far as it was asserted that two separate businesses were carried on respectively by (1) the partnership of father and son, and (2) the son alone acting as a sole trader, the tribunal should examine the substance and reality and should only conclude that there are only separate taxable supplies if (1) the so called separate businesses are sufficiently at arms length each from the other; and (2) the businesses have normal commercial relationships each with the other."

10.

In this case Customs and Excise argued that the Burrell case lays down a rule of law that the tribunal is obliged to follow. We do not agree. The passage quoted from the judgment of Ognall J. should be read in context. What he was concerned about in that case was whether there was an error of law. The Appellant argued that there was an error of law in that the tribunal had reached a conclusion on the facts that was not open to it. In order to succeed the Appellant therefore had to persuade the judge that the tribunal could not reasonably have reached the conclusion it did. The paragraph which contains the passage quoted above begins with the sentence "it may be that others would have reached a different conclusion." Ognall J. is therefore referring to the fact that the tribunal had reached conclusions of fact but that a different tribunal might have reached different conclusions. The judge's decision appears in the last paragraph of the judgment in which he says: "I am quite satisfied that, in the light of the findings as expressed by the chairman, that it was entirely open to him to reach the conclusion which he did on this important preliminary issue." That sentence makes it clear that the court was concerned only with whether the tribunal's decision could be overturned as being one not reasonably open to it on the facts. In that context the passage quoted is clearly intended as guidance to the tribunal and does not purport to lay down any rule of law. There are four reasons why we have concluded that Ognall J. did not lay down a rule of law to be followed by the tribunal in cases like the present. The first is the form in which his judgment is given as explained in the preceding paragraph. Secondly, it is a long established principle of UK tax law that taxpayers are entitled to arrange their affairs to avoid having to pay tax if they wish to do so, provided they do so within the law. If Ognall J. had laid down a rule of law that persons in business cannot arrange their business affairs to suit their own preferred trading methods he would have departed from that long established principle and the absence of any reference to it or to the authorities that established it negates any conclusion that he intended to do so.

11.

Thirdly we were referred to the case of Mr B R Parker and Mrs J G Parker t/a Sea Breeze Cafe Tribunal case no. 16350. In that case the tribunal cited the same passage from Burrell as we have cited and then continued as follows:

"Accordingly, we apply this test. In doing so, and as part of the substance and reality, we consider that we should not expect relationships between husband and wife to be wholly at arms length or commercial. The fact that Mrs Parker helps in her husband's part, particularly on the financial side, we do not regard as strong evidence against the separation of the businesses."

Had the Burrell case laid down a rule of law the tribunal could not have taken into account that the parties in the Sea Breeze case were husband and wife, which is clearly a relevant factor if the tribunal is required to come to a conclusion looking at the facts overall but would be irrelevant if Ognall J.'s words are taken to lay down a rule of law.

Fourthly, a rule of law couched in terms such as "sufficiently at arms length" and "normal commercial relationships" would lack certainty which is a further reason to think Ognall J. was giving guidance not laying down a rule.

12.

That is not to say that Ognall J.'s words do not give guidance to the tribunal which is valuable guidance as to how to approach questions of fact in cases like the present.

13.

For completeness we mention that the following cases were cited to us: Catherine Hunter & Others t/a Blues Hairshop Case No. 16558; Roger Edward Newton and another t/a R E Newton Case No. 17222; John Nicholas Edward Ashcroft & Susan Ashcroft Case No. 17476; William and Beryl Brough t/a Chaddy Cars Case No. 16700. We have read and considered those cases which are examples of findings of fact by the tribunal. We do not consider that they lay down any propositions of law. We now turn to consider the facts.

The Evidence
14.

We heard evidence from Mrs M Haycock from an organisation called Antur Menai which is an enterprise agency on the island of Anglesey. In 1999 Mrs Haycock was involved in advising Mr and Mrs Hughes about their business or businesses. This was of course some years after the date which is most relevant to the tribunal's consideration of the appeal. We say immediately that we accepted the evidence of Mrs Haycock as being truthful and in many respects relevant. However, we do have to bear in mind that her evidence is based on what she was told by Mr and Mrs Hughes after the VAT enquiry began and also some years after the relevant time.

15.

She told us that her impression was that there were two separate businesses and that she had gained this impression right from her first involvement with Mr and Mrs Hughes. She referred to the fact that Mr and Mrs Hughes have very different characters and that Mr Hughes was very forthright in his dealings with the drivers whereas Mrs Hughes took a more relaxed attitude and she, Mrs Haycock, formed the impression that the drivers dealt with either Mr Hughes or Mrs Hughes according to which of them owned the vehicle that that driver drove. She was told that only Mr Hughes was interested in contract work and that he saw that as a way that he wanted to develop his business. Mrs Hughes had had an idea of advertising the name "Style" on the side of her taxis and indeed it is accepted that she did do that for a while. Mrs Haycock explained that Mrs Hughes hoped to be able to generate income from advertising another business which traded under the name Style. Mrs Haycock told us that only the radio controllers dealt with both Mr and Mrs Hughes and that the drivers reported, as she put it, to one or other of them. Mrs Haycock lives in the Holyhead area and she told us that Mr Hughes is very well known and there was really no need to advertise the taxi business or businesses. She referred also to having seen bank and business records and corroborated the other evidence that these were kept separate as we shall explain later.

16.

Cross examined by Mr Cannan Mrs Haycock added that Mr Hughes was attempting to obtain other contracts besides the one with Ynys Mon Council and indeed subsequently did obtain a contract with the ferry company Stenna. Mrs Haycock was unable to say from direct knowledge what the position was about hiring and dismissing drivers. She did say that in her opinion the radio operators could have been fired or dismissed by either of the Appellants. The radio operators were controlled by either Mr or Mrs Hughes when Mrs Haycock was on the taxi premises but she added that it was only a small business and it was quite informal at times. She told us that there had been an increase from £135 a week to £ 145 a week in the amount the drivers paid and that this was probably in 2000. She had done an analysis of the costs and advised that an increase was necessary. She told us that the figure of £145 had been decided at a joint meeting of both the Appellants and that although Mr Hughes thought it should have been more, Mrs Hughes did not think that was feasible and that Mr Hughes decided not to charge more because that would have caused dissent. Mrs Haycock understood that other taxi drivers in the area did not operate in the same way and so the fees paid by drivers were not necessarily fixed throughout the area.

17.

Mrs Haycock understood that seven vehicles had been purchased from Peugeot some time before her involvement and that while she was involved in advising the business all seven vehicles were changed and new ones purchased at the same time. The radio operators were paid in cash from the money which the drivers paid and the method of handling the cash was that either Mr or Mrs Hughes would take the money from the drivers and either of them would pay the radio operators. She said that she didn't know how it was decided between Mr and Mrs Hughes how payments would be made but she understood that sometimes a payment would be made by Mr Hughes or Mrs Hughes depending on which of them had money in their bank account to make the payment and as she said it would be silly for one of them to be overdrawn if the other had money in their account given that they were married. She was unable to say precisely how individual items, some of which are referred to in the annual accounts of Mr and Mrs Hughes respectively, that we have seen, were divided between the two accounts. She said that the apportionment between the two accounts in respect of the payments made "defied logic".

18.

As to the method of trading, Mrs Haycock said that her understanding was that work was allocated by the radio operators to whichever car was nearest to the place from which the customer wished to travel but that the contract work was always allocated to one of Mr Hughes' drivers because he required his drivers to be more smartly dressed than Mrs Hughes and the contract work needed to be carried out in a business-like way. At one point some of the drivers had complained that Mr Hughes' drivers got preferential treatment from the radio operators and that special software had been purchased to record the allocations to avoid this.

19.

She agreed that as far as the public were concerned there would appear to be just one business which went under the name of "Star" and that the public would not know that there was a second business (Mrs Hughes' business) trading under the name "Style". The only advertising was an entry in the Yellow Pages under the name Star but Mrs Haycock said that it was her belief that little if any advertising was needed and after a while the Yellow Pages entry became a free entry because it was no longer in bold type.

20.

Mrs Haycock agreed with Mr Cannan that the telephone number was a source of work but she pointed out that a lot of the business was generated from outside the office and in her opinion telephone calls made to the office requiring the radio operator to send out a message to the driver accounted for only about 40% of the work, the rest being Hackney Carriage work obtained by plying for hire.

21.

She said that in the time she had been dealing with Mr and Mrs Hughes she had never known them to take time off in the sense of being away from the business or businesses for a period of time. Both of them were not there at all times but Mrs Haycock said that at least one of them was there most of the time and indeed that Mr Hughes was normally at the office throughout the day, Mrs Hughes taking more time off during the day.

22.

Mrs Haycock told us that the business or businesses had ceased trading under the name Star and/or Style in 2001 and that the business had been sold. Mr Hughes now runs a smaller business consisting of mini bus hire and the hire of a single Mercedes Benz car under the name DP Corporate Hire and Mrs Hughes has retired from business.

The Star/Style business or businesses were sold as a going concern but Mrs Haycock understood that there had been no payment for good will and that only the vehicles and some fixtures and fittings were sold. However the business premises which had been jointly owned by Mr and Mrs Hughes were also sold to the purchaser of the going concern business.

23.

In answer to questions from the tribunal Mrs Haycock said that she understood that the purchase of the new vehicles was carried out by entering into hire purchase agreements and that the deposit was usually raised by the sale of the previous vehicle but that she did not know precisely how Mrs Hughes had raised the deposit for the first three vehicles that she bought although Mrs Haycock understood that she had received a bequest from a member of her family.

24.

At the end of Mrs Haycock's evidence as already noted the tribunal reiterated to Mr Taberner that it would be likely to be in Mr Hughes's interest to give evidence but Mr Taberner reaffirmed that Mr Hughes did not wish to do so. Following that Mrs Haycock was recalled and gave evidence that to her knowledge Mr Hughes had been suffering from depression and had been taking medication.

25.

Mr Reid gave evidence on behalf of the Commissioners. His evidence consisted of producing some of the correspondence. He told us that he had originally been told that there were only six cars purchased at the time Mrs Hughes became involved in the business but that subsequently it was admitted that there were seven after someone from Customs and Excise had noticed that there were seven consecutive numbers recorded against Mr Hughes as the vehicles' keeper. However we should add that it was not suggested that Customs and Excise had any evidence to prove that the reference to six cars had been in any way an attempt to deceive them and Mr Reid agreed that he had no way of knowing whether the reference to six cars had been intended to disguise the existence of the seventh.

26.

Little of the evidence was disputed in this case and we now analyse the evidence into factors which suggest that there was one business and factors which suggest that there were two.

Factors suggesting one business
27.

The following paragraphs set out the factors which we consider suggest that there was only one business. We have set them out in descending order of importance, starting with what we regard as the most important.

There is a single telephone number. Taxi firms depend in large measure for their business on familiarity with the telephone number that they use to obtain bookings. In this case although Mr and Mrs Hughes have contended that they operate separate businesses under the names Star and Style respectively the public are only given one telephone number to ring. As this is a very important aspect of the taxi business we regard it as very significant that the Style business which Mrs Hughes claimed to have set up in 1993 or 1994 did not obtain a new telephone number. We acknowledge that as the number was already well known to the public it may have been counter productive to attempt to establish a new number but nonetheless it is surprising that a new independent business did not obtain its own number.

28.

The method by which the payments were received was that the drivers would pay either Mr Hughes or Mrs Hughes for the use of their vehicle. In principle this could lead to a division of the profits of the business. However because payments were made by an informal system which as Mrs Haycock said defied logic and which depended on whose bank account happened to have a positive balance at the time a payment needed to be made, the effect is that the profits of the two businesses were in fact pooled and shared between Mr and Mrs Hughes albeit in an informal and unstructured way. Had it been intended to divide the profits some method of sharing the expenses, presumably in a ratio of 4:3, would need to have been established. Whilst acknowledging that husband and wife may not wish to run their businesses in a very formal way the effect of the way in which the businesses were run is that the profits were shared in a rough and ready manner.

29.

There was no system, as far as we were told in evidence, for cross charging between the two businesses, even when the accounts were drawn up.

30.

Radio operators were jointly engaged. At first they were self employed and as we understand from Mrs Haycock's evidence subsequently they became employees, possibly at the insistence of the Inland Revenue. The drivers were by the nature of their business self employed so that the only employees of the two businesses were jointly employed.

31.

The business or businesses undoubtedly both traded under the name "Star" as far as the public were concerned. This is not perhaps of prime importance, many businesses, for example franchise businesses, do trade under a name which they share without in fact being the same business. However the facts that such advertising as was done and that the cars were as we were told all coloured in the same livery does strengthen the argument that it is significant that the business or businesses both traded under the same name and were presented to the public as a single business.

32.

Customs and Excise relied on the fact that Mr Hughes was the registered keeper of all the vehicles. We do not regard this a particularly important factor. Mr Taberner told us, and we see no reason to doubt it, that this was simply because the garage which sold the cars to Mr and Mrs Hughes put him down as the registered keeper and as the registered keeper is not necessarily the owner of the vehicle we attach no particular importance to this factor.

33.

There is only one radio "base station". This may be partly for historical reasons in the sense that Mr Hughes was in business before Mrs Hughes ever became involved and no doubt it would not have made economic sense to have two radio stations. We attach therefore little significance to this fact.

34.

We were told that the utilities and certain other suppliers invoiced the "Star" business and that there were not separate bills issued to Star and Style. We attach little significance to this because the utilities would no doubt have been reluctant to issue two bills, although it is significant, as we have already stated, that when the payments were made they were not split between the two businesses in any economically sensible manner.

Factors suggesting two businesses
35.

The fact that the drivers were hired and dismissed by either Mr or Mrs Hughes and the different management style of each of them referred to by Mrs Haycock is an indication that there were two businesses. However, we were not told what the precise arrangements were between the drivers and either Mr or Mrs Hughes. We do not know whether the drivers were required to be on duty at any particular time. It seems likely that they were because as we understood it there were two drivers for each car and there must have been some system for allocating time between them. Nor was it necessarily a matter of indifference to Mr and Mrs Hughes how many drivers were on duty at any one time. The name "Star" was known to the public in the area and so in order to maintain the viability of that trading name it must have been necessary for there to be a number of drivers available proportionate to the amount of work likely to be available at any particular time of the week. We were not told how, if at all, Mr and Mrs Hughes ensured that the necessary level of vehicle availability was secured. It seems inevitable that there must have been some co-ordination. Given that the drivers were all driving under the umbrella of "Star" we do regard the fact that the drivers were separately hired and the separate management of the drivers as being of somewhat less significance than it might otherwise have been.

36.

Mr and Mrs Hughes kept separate bank accounts and records. They kept their cars insured separately and they had separate Hackney Carriage licences naming one or other of them in respect of each vehicle. All these facts are established by documentary evidence that we have seen and they are consistent at least with these being two separate businesses. These facts certainly establish that there was an intention on the part of Mr and Mrs Hughes to operate separate businesses. However the bare intention of operating separate businesses is not sufficient to establish that there are in fact two businesses. These factors are certainly significant and certainly favour the Appellant's case but they are not conclusive.

37.

The cars were purchase by either Mr or Mrs Hughes respectively.

38.

Mrs Hughes's first involvement with taxis coincided with the sale of a public house business in respect of which Mr and Mrs Hughes had been partners. We were told that she had been the person most closely connected with the actual running of the public house so that when the business was sold she had more time to devote to some other business activity. It is significant that at that point in her life she became involved in the taxi business and as we were informed the business if indeed it is one business, expanded because there had previously been four cars and now there were seven. These facts certainly mean that Mrs Hughes had the opportunity to develop a new business but equally she had the opportunity to become involved in an expanded form of the business that her husband was already operating.

39.

The fact that contract work was done mostly by Mr Hughes's drivers or possibly exclusively by his drivers is relevant to the question whether there were two businesses because it is an aspect of his business that could be described as being separate and different from that of Mrs Hughes's business. However the evidence that only Mr Hughes's drivers did this work is indirect in the sense that we have only the evidence of the impression formed by Mrs Haycock.

Conclusions
40.

Our decision must inevitably be partly one of impression. We have to consider the totality of the evidence and arrive at a conclusion based upon it but because the evidence consists of factors pointing in both directions which cannot in themselves be precisely measured we have to take an overall view and base our conclusion upon it.

41.

Our conclusion is that the Appellants may well have had the intention of forming two separate businesses and indeed had they given evidence they may well have given evidence to that effect and we may have accepted it. However, as we have already pointed out, their intention to form two businesses is not the same thing as the actual formation of two businesses.

42.

Our conclusion is that Mr and Mrs Hughes were sharing the profits of the taxi business activities and that the activities which might have been those of each of them separately were intermingled and interdependent. This leads to the conclusion that there was only one business. We also conclude that there was a partnership between Mr and Mrs Hughes although that is not an essential finding. If we are wrong about there being a partnership then we agree with Mr Cannan that there was a joint venture between two persons who by reason of the Interpretation Act can be regarded as a person for the purposes of Value Added Tax registration.

43.

It follows that the appeal must be dismissed.

44.

Mr Cannan on behalf of Customs and Excise did not ask for costs in the event that the appeal failed. We accordingly make no order in respect of costs.