Baxi Group Ltd. v Revenue and Customs

Baxi Group Ltd. v Revenue and Customs

Baxi's payment to @1 for the loyalty scheme, including the provision of goods to installers, was consideration for a single supply of advertising and marketing services to Baxi. The services included the discharge of Baxi's obligation to installers. Therefore, the VAT paid by Baxi to @1 is deductible as input tax.

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
Outcome
Appeal dismissed
Legal Topics
Value Added Tax (vat), Input Tax Deduction, Supply of Goods and Services, Third Party Consideration, Loyalty Schemes
Tax Law European Union Law Value Added Tax (vat) Input Tax Deduction Supply of Goods and Services Third Party Consideration Loyalty Schemes

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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

Legal Issues

  1. 1 Whether VAT paid by Baxi to @1 for loyalty scheme rewards is deductible as input tax
  2. 2 Whether the supply by @1 to Baxi is a supply of goods, services, or both for VAT purposes
  3. 3 Whether the payment by Baxi is consideration for services supplied to it or for goods supplied to installers

Ratio Decidendi

Baxi's payment to @1 for the loyalty scheme, including the provision of goods to installers, was consideration for a single supply of advertising and marketing services to Baxi. The services included the discharge of Baxi's obligation to installers. Therefore, the VAT paid by Baxi to @1 is deductible as input tax.

Court Disposition

Appeal dismissed

Orders

  • Baxi entitled to deduct VAT paid to @1 as input tax
  • No order for repayment to Baxi as claim failed at Tribunal level