Fanfield Ltd & Anor v Revenue & Customs [2011] UKFTT 42 (TC) (11 January 2011)

Fanfield Ltd & Anor v Revenue & Customs [2011] UKFTT 42 (TC) (11 January 2011)

Interest on bank deposits held by the appellants does not arise in the course or furtherance of their business and is not a direct, permanent, and necessary extension of their core business activities; therefore, such interest is outside the scope of VAT and does not form part of relevant turnover for Flat Rate Scheme calculations.

Citation
[2011] UKFTT 42 (TC)
Parties
First Appellant: Fanfield Limited; Second Appellant: Thexton Training Limited; Respondents: The Commissioners for Her Majesty’s Revenue and Customs (VAT)
Jurisdiction
United Kingdom
Judgment Date
11 January 2011
Procedural Posture
VAT Appeal (first Tier Tribunal Tax) / Final Judgment
Outcome
Appeals allowed
Legal Topics
Flat Rate Scheme, Relevant Turnover, Exempt Supplies, Bank Interest, Scope of VAT
Tax Law VAT Flat Rate Scheme Relevant Turnover Exempt Supplies Bank Interest Scope of VAT

Case Brief

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Parties

Fanfield Limited

First Appellant

Thexton Training Limited

Second Appellant

The Commissioners for Her Majesty’s Revenue and Customs (VAT)

Respondents

Procedural Posture

VAT Appeal (first Tier Tribunal Tax) / Final Judgment

Legal Issues

  1. 1 Whether bank interest earned by the appellants constitutes an exempt supply for VAT purposes under the Flat Rate Scheme
  2. 2 Whether such interest is within the scope of VAT as arising in the course or furtherance of business

Ratio Decidendi

Interest on bank deposits held by the appellants does not arise in the course or furtherance of their business and is not a direct, permanent, and necessary extension of their core business activities; therefore, such interest is outside the scope of VAT and does not form part of relevant turnover for Flat Rate Scheme calculations.

Court Disposition

Appeals allowed

Orders

  • Interest on bank deposits is outside the scope of VAT and does not form part of relevant turnover for Flat Rate Scheme calculations.