Baxi Group Ltd. v Revenue and Customs [2007] EWCA Civ 1378 (20 December 2007)

Baxi Group Ltd. v Revenue and Customs [2007] EWCA Civ 1378 (20 December 2007)

Baxi was entitled to deduct as input tax the VAT paid to @1 Group for the operation of the loyalty scheme, including the provision of goods to installers, because the payment to @1 was for a single indivisible supply of marketing services to Baxi, which included discharging Baxi's obligation to installers; the economic reality was that Baxi received a service for its business purposes, and the VAT was properly deductible.

Citation
[2007] EWCA Civ 1378
Parties
Appellant/respondent: Baxi Group Limited; Respondents/appellants: The Commissioners for Her Majesty's Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
20 December 2007
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
Legal Topics
Value Added Tax (vat), Input Tax Deduction, Supply of Goods and Services, Loyalty Schemes, Third Party Consideration
Tax Law European Union Law Value Added Tax (vat) Input Tax Deduction Supply of Goods and Services Loyalty Schemes Third Party Consideration

Case Brief

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Parties

Baxi Group Limited

Appellant/respondent

The Commissioners for Her Majesty's Revenue and 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 Baxi Group Limited is entitled to deduct as input tax the VAT paid to @1 Group for goods supplied to installers under a loyalty scheme
  2. 2 Whether the supply by @1 Group to Baxi is a single indivisible supply of marketing services or a supply of goods to installers for third party consideration

Ratio Decidendi

Baxi was entitled to deduct as input tax the VAT paid to @1 Group for the operation of the loyalty scheme, including the provision of goods to installers, because the payment to @1 was for a single indivisible supply of marketing services to Baxi, which included discharging Baxi's obligation to installers; the economic reality was that Baxi received a service for its business purposes, and the VAT was properly deductible.

Court Disposition

Appeal dismissed

Orders

  • Baxi's entitlement to input tax deduction upheld; Commissioners' appeal dismissed.