DCM (Optical Holdings) Ltd v Revenue & Customs [2010] UKFTT 393A (TC) (20 August 2010)

DCM (Optical Holdings) Ltd v Revenue & Customs [2010] UKFTT 393A (TC) (20 August 2010)

Zoning should be excluded from the Partial Exemption Special Method for apportioning residual input tax, including for rental, because rent is a single, indivisible cost for the entirety of the premises. This approach is consistent with prior Tribunal decisions and the High Court judgment in Vision Express.

Citation
[2010] UKFTT 393A (TC)
Parties
Appellant: DCM (Optical Holdings) Ltd; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
20 August 2010
Procedural Posture
VAT Appeal (partial Exemption Special Method) / Continued Hearing Following Remittal From Court of Session
Outcome
PESM approved in principle subject to exclusion of zoning; expenses awarded to Appellant for first two hearings, to Respondents for third hearing.
Legal Topics
Partial Exemption Special Method, Input Tax Apportionment, Zoning in Rental Valuation
Tax Law VAT Partial Exemption Special Method Input Tax Apportionment Zoning in Rental Valuation

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 2 Authorities cited 6 Party arguments 2
Sign in to unlock

Parties

DCM (Optical Holdings) Ltd

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

VAT Appeal (partial Exemption Special Method) / Continued Hearing Following Remittal From Court of Session

Legal Issues

  1. 1 Whether zoning should be retained in the Partial Exemption Special Method (PESM) for apportioning residual input tax on rental
  2. 2 Whether the PESM is fair and reasonable with or without zoning

Ratio Decidendi

Zoning should be excluded from the Partial Exemption Special Method for apportioning residual input tax, including for rental, because rent is a single, indivisible cost for the entirety of the premises. This approach is consistent with prior Tribunal decisions and the High Court judgment in Vision Express.

Court Disposition

PESM approved in principle subject to exclusion of zoning; expenses awarded to Appellant for first two hearings, to Respondents for third hearing.

Orders

  • Zoning to be excluded from PESM for all residual expenditure including rental.
  • Respondents liable for Appellant's expenses for hearings on 13-16 February 2006 and 15-19 June 2009.