Gosling Leisure Ltd v Revenue & Customs [2012] UKFTT 170 (TC) (05 March 2012)

Gosling Leisure Ltd v Revenue & Customs [2012] UKFTT 170 (TC) (05 March 2012)

The Tribunal held that the Appellant was lawfully occupying and using the premises under at least a licence, and all relevant expenditure was directly and immediately linked to its taxable supplies. The absence of a formal lease or sub-lease did not preclude input tax deduction, as the Appellant was not a trespasser and was the true supplier of the services. The arrangements were not artificial or VAT-motivated, and the Appellant was entitled in principle to deduct input VAT on the construction costs attributable to its taxable supplies.

Citation
[2012] UKFTT 170
Parties
Appellant: Gosling Leisure Ltd; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
05 March 2012
Procedural Posture
VAT Input Tax Appeal / First Tier Tribunal (tax), Substantive Decision on Principle
Outcome
Appeal allowed (decision in principle)
Legal Topics
VAT Input Tax Deduction, Attribution of Capital Costs, Licences Vs Leases for VAT, Charity Property Disposals, Capital Goods Scheme
Tax Law Charity Law Property Law VAT Input Tax Deduction Attribution of Capital Costs Licences Vs Leases for VAT Charity Property Disposals Capital Goods Scheme

Case Brief

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Parties

Gosling Leisure Ltd

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

VAT Input Tax Appeal / First Tier Tribunal (tax), Substantive Decision on Principle

Legal Issues

  1. 1 Whether capital costs incurred by the Appellant are directly and immediately related to its taxable supplies for VAT input deduction purposes
  2. 2 Whether the absence of a formal lease or licence precludes input tax recovery
  3. 3 How supplies under a licence (not lease) are treated for VAT purposes

Ratio Decidendi

The Tribunal held that the Appellant was lawfully occupying and using the premises under at least a licence, and all relevant expenditure was directly and immediately linked to its taxable supplies. The absence of a formal lease or sub-lease did not preclude input tax deduction, as the Appellant was not a trespasser and was the true supplier of the services. The arrangements were not artificial or VAT-motivated, and the Appellant was entitled in principle to deduct input VAT on the construction costs attributable to its taxable supplies.

Court Disposition

Appeal allowed (decision in principle)

Orders

  • Appellant entitled in principle to deduct input VAT on construction costs attributable to its taxable supplies; detailed quantum and capital goods scheme adjustments to be determined separately.