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 on rental, as rental is a single, indivisible cost for the entirety of the premises and cannot be segmented by zoning. This approach is consistent with established case law and ensures a fair and reasonable apportionment.

Citation
[2010] UKFTT 393A
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
Value Added Tax Appeal / Continued Hearing Following Remittal From Court of Session
Outcome
PESM approved in principle subject to exclusion of zoning for rental; expenses awarded to Appellant for first two hearings, to Respondents for third hearing.
Legal Topics
Value Added Tax, Partial Exemption Special Method, Input Tax Apportionment, Zoning in Rental Valuation
Tax Law Value Added Tax 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 5 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

Value Added Tax Appeal / 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 proposed 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 on rental, as rental is a single, indivisible cost for the entirety of the premises and cannot be segmented by zoning. This approach is consistent with established case law and ensures a fair and reasonable apportionment.

Court Disposition

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

Orders

  • PESM to be implemented without zoning for rental.
  • Respondents liable for Appellant's expenses for hearings on 13-16 February 2006 and 15-19 June 2009.