Colaingrove Ltd v Revenue & Customs [2013] UKFTT 295 (TC) (11 January 2013)

Colaingrove Ltd v Revenue & Customs [2013] UKFTT 295 (TC) (11 January 2013)

The tribunal held that the most appropriate method for apportioning the consideration for new caravans is Method 2A (a modified version of the method in VAT Notice 701/20), provided the relevant fraction can be fairly set using available evidence. This method is inherently simpler and more closely directed at the...

Source-derived case information.

Citation
[2013] UKFTT 295
Parties
Appellant: Colaingrove Limited; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
11 January 2013
Procedural Posture
VAT Appeal (apportionment of Consideration) / First Tier Tribunal (tax Chamber) Decision
Outcome
Appeal allowed in part; directions given for method of apportionment.
Legal Topics
Apportionment of Consideration, Zero Rating, Standard Rating, Removable Contents, Caravans, VAT Schemes
Tax Law VAT Apportionment of Consideration Zero Rating Standard Rating Removable Contents Caravans VAT Schemes

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Parties

Colaingrove Limited

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

VAT Appeal (apportionment of Consideration) / First Tier Tribunal (tax Chamber) Decision

Legal Issues

  1. 1 What is the proper method for apportioning the consideration received on the sale of a caravan between removable contents and the remainder of the caravan for VAT purposes?
  2. 2 Whether the methods proposed by the parties or HMRC result in a fair and reasonable apportionment under VAT law.

Ratio Decidendi

The tribunal held that the most appropriate method for apportioning the consideration for new caravans is Method 2A (a modified version of the method in VAT Notice 701/20), provided the relevant fraction can be fairly set using available evidence. This method is inherently simpler and more closely directed at the required objective than methods based on replacement value. If the fraction cannot be set, Method 1 (the previously agreed method) should be used. For second-hand and used caravans, the only practicable method is the valuation method, with installation and assembly costs split 50:50 between the caravan and the fixture, abated for depreciation. The tribunal rejected methods based...

Court Disposition

Appeal allowed in part; directions given for method of apportionment.

Orders

  • For new caravans, Method 2A should be used if the relevant fraction can be fairly set; otherwise, Method 1 applies.
  • For second-hand and used caravans, the valuation method applies with a 50:50 split of installation/assembly costs, abated for depreciation.