Canotec Ltd v Revenue & Customs [2011] UKFTT 661 (TC) (12 October 2011)

Canotec Ltd v Revenue & Customs [2011] UKFTT 661 (TC) (12 October 2011)

Canotec’s undertaking to procure the release of the customer’s obligations under the existing lease was an inseverable part of a tripartite deal, assumed in the course of its business for making taxable supplies. The VAT on the payments for termination of the leases was incurred for the purposes of Canotec’s...

Source-derived case information.

Citation
[2011] UKFTT 661
Parties
Appellant: Canotec Limited; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
12 October 2011
Procedural Posture
VAT Input Tax Appeal / First Tier Tribunal (tax) Decision
Outcome
Appeal allowed
Legal Topics
Input Tax, Attribution of VAT, Finance Leasing, Supply for Consideration
Tax Law VAT Input Tax Attribution of VAT Finance Leasing Supply for Consideration

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Parties

Canotec Limited

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

VAT Input Tax Appeal / First Tier Tribunal (tax) Decision

Legal Issues

  1. 1 Whether VAT charged on payments made by Canotec to finance leasing companies for termination of existing finance leasing agreements is input tax for Canotec under VATA 1994 s.24(1)

Ratio Decidendi

Canotec’s undertaking to procure the release of the customer’s obligations under the existing lease was an inseverable part of a tripartite deal, assumed in the course of its business for making taxable supplies. The VAT on the payments for termination of the leases was incurred for the purposes of Canotec’s business and is therefore input tax recoverable by Canotec.

Court Disposition

Appeal allowed

Orders

  • Assessment to recover £11,549.37 plus interest is dismissed