Bookit Ltd v HM Revenue & Customs [2006] EWCA Civ 550 (11 May 2006)

Bookit Ltd v HM Revenue & Customs [2006] EWCA Civ 550 (11 May 2006)

The Court of Appeal held that Bookit's card handling services, for which it charged a fee to customers, constituted transactions concerning payments/transfers within Article 13B(d)(3) of the Sixth VAT Directive and Group 5, Schedule 9, VATA 1994. The essential feature of Bookit's supply was the transmission of card/payment information and authorisation codes to Girobank, resulting in the transfer of funds from the customer or card issuer to Bookit's account. This was more than mere technical assistance and was a necessary incident of effecting payment, thus falling within the VAT exemption for financial services. The tribunal erred in failing to appreciate the legal and financial effect...

Citation
[2006] EWCA Civ 550
Parties
Appellant/respondent: Bookit Limited; Respondents/appellants: Commissioners of HM Revenue & Customs
Jurisdiction
England and Wales
Judgment Date
11 May 2006
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeal From High Court (chancery Division), Which Was Itself an Appeal From the VAT and Duties Tribunal
Outcome
Appeal dismissed; High Court decision upheld
Legal Topics
Value Added Tax (vat), Exempt Supplies, Financial Services Exemptions, Interpretation of Sixth VAT Directive, Composite and Single Supply Analysis
Tax Law European Union Law Value Added Tax (vat) Exempt Supplies Financial Services Exemptions Interpretation of Sixth VAT Directive Composite and Single Supply Analysis

Case Brief

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Parties

Bookit Limited

Appellant/respondent

Commissioners of HM Revenue & Customs

Respondents/appellants

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Appeal From High Court (chancery Division), Which Was Itself an Appeal From the VAT and Duties Tribunal

Legal Issues

  1. 1 Whether the card handling services supplied by Bookit to cinema customers for a fee are exempt from VAT as transactions concerning payments/transfers under Article 13B(d)(3) of the Sixth VAT Directive and Group 5, Schedule 9, VATA 1994;
  2. 2 Whether Bookit's services constitute a single composite supply or multiple supplies;
  3. 3 Whether Bookit acts as an intermediary or negotiator for VAT exemption purposes

Ratio Decidendi

The Court of Appeal held that Bookit's card handling services, for which it charged a fee to customers, constituted transactions concerning payments/transfers within Article 13B(d)(3) of the Sixth VAT Directive and Group 5, Schedule 9, VATA 1994. The essential feature of Bookit's supply was the transmission of card/payment information and authorisation codes to Girobank, resulting in the transfer of funds from the customer or card issuer to Bookit's account. This was more than mere technical assistance and was a necessary incident of effecting payment, thus falling within the VAT exemption for financial services. The tribunal erred in failing to appreciate the legal and financial effect...

Court Disposition

Appeal dismissed; High Court decision upheld

Orders

  • Bookit's card handling services to customers are exempt from VAT under Article 13B(d)(3) of the Sixth VAT Directive and Group 5, Schedule 9, VATA 1994.
  • The Commissioners' appeal is dismissed.