Findel plc v Revenue & Customs [2011] UKFTT 723 (TC) (09 November 2011)

Findel plc v Revenue & Customs [2011] UKFTT 723 (TC) (09 November 2011)

Donations made by supporters in connection with catalogue sales were not voluntary and were inextricably linked to the supply of goods. The full amount paid by supporters, including the donation element, constituted consideration for VAT purposes. The OMV direction applied to WIM catalogue sales, requiring VAT to be accounted for on the open market value, which included the donation. The appeal was dismissed as the sums paid to good causes formed part of the consideration for the supply of goods.

Citation
[2011] UKFTT 723 (TC)
Parties
Appellant: Findel plc; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
09 November 2011
Procedural Posture
VAT Appeal / First Tier Tribunal (tax) Substantive Hearing and Decision
Outcome
Appeal dismissed
Legal Topics
Value Added Tax (vat), Consideration in VAT, Open Market Value (omv) Directions, Charitable Donations and VAT, Supply of Goods, VAT Grouping
Tax Law European Union Law Value Added Tax (vat) Consideration in VAT Open Market Value (omv) Directions Charitable Donations and VAT Supply of Goods VAT Grouping

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Parties

Findel plc

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

VAT Appeal / First Tier Tribunal (tax) Substantive Hearing and Decision

Legal Issues

  1. 1 Whether donations to good causes by company making catalogue sales were part of consideration for its supplies for VAT purposes
  2. 2 Whether VAT output tax is payable on the whole sum paid by supporters or only on the net sum excluding donations
  3. 3 Whether OMV directions applied to the supplies in question

Ratio Decidendi

Donations made by supporters in connection with catalogue sales were not voluntary and were inextricably linked to the supply of goods. The full amount paid by supporters, including the donation element, constituted consideration for VAT purposes. The OMV direction applied to WIM catalogue sales, requiring VAT to be accounted for on the open market value, which included the donation. The appeal was dismissed as the sums paid to good causes formed part of the consideration for the supply of goods.

Court Disposition

Appeal dismissed

Orders

  • Findel plc is liable to account for VAT on the whole sum paid by supporters, including the donation element.
  • The OMV direction remains applicable to WIM catalogue sales for the relevant periods.