Gap Group Limited v The Commissioners for HMRC

Gap Group Limited v The Commissioners for HMRC

The supplies of plant hire and red diesel fuel by the appellant constitute multiple supplies for VAT purposes because customers had a genuine economic choice whether to purchase fuel from the appellant or supply their own, the supplies were separately invoiced and priced, and the economic reality was that the fuel supply was not inseparable or indispensable to the plant hire. Thus, the fuel supply is not part of a single composite supply and should be taxed at the reduced rate.

Parties
Appellant: GAP Group Limited; Respondents: The Commissioners for His Majesty’s Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
11 October 2024
Procedural Posture
Tax Appeal / First Tier Tribunal (tax Chamber) Judgment
Outcome
Appeal allowed
Legal Topics
Value Added Tax (vat), Composite and Multiple Supplies, Plant Hire, Supply of Fuel, VAT Assessment, Reduced Rate VAT, Contract Interpretation
Tax Law Value Added Tax (vat) Composite and Multiple Supplies Plant Hire Supply of Fuel VAT Assessment Reduced Rate VAT Contract Interpretation

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Parties

GAP Group Limited

Appellant

The Commissioners for His Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / First Tier Tribunal (tax Chamber) Judgment

Legal Issues

  1. 1 Whether the supply of fuel formed part of the supply of plant hire as a single composite supply or was a separate supply for VAT purposes
  2. 2 If a single supply, whether the fuel element should be taxed at the reduced rate

Ratio Decidendi

The supplies of plant hire and red diesel fuel by the appellant constitute multiple supplies for VAT purposes because customers had a genuine economic choice whether to purchase fuel from the appellant or supply their own, the supplies were separately invoiced and priced, and the economic reality was that the fuel supply was not inseparable or indispensable to the plant hire. Thus, the fuel supply is not part of a single composite supply and should be taxed at the reduced rate.

Court Disposition

Appeal allowed

Orders

  • The appellant's supplies of plant and supplies of red diesel constitute multiple supplies for VAT purposes.
  • The VAT assessments by HMRC are set aside to the extent inconsistent with this finding.