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

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

The Tribunal held that Canotec’s payment of the termination costs was an inseverable part of the tripartite transaction enabling the supply of new equipment, and the VAT on those payments was input tax for Canotec as it was incurred for the purposes of its business.

Citation
[2011] UKFTT 661 (TC)
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 Supply, Finance Leasing, Section 24(1) VAT Act 1994
Tax Law VAT Input Tax Attribution of Supply Finance Leasing Section 24(1) VAT Act 1994

Case Brief

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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 termination payments under finance leases is input tax for the equipment dealer (Canotec) under section 24(1) VAT Act 1994

Ratio Decidendi

The Tribunal held that Canotec’s payment of the termination costs was an inseverable part of the tripartite transaction enabling the supply of new equipment, and the VAT on those payments was input tax for Canotec as it was incurred for the purposes of its business.

Court Disposition

Appeal allowed

Orders

  • Assessment to recover £11,549.37 plus interest dismissed