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's capital expenditure was directly and immediately linked to its taxable supplies, as it was the entity incurring the costs, providing the services, and receiving the revenues. The absence of a formal sub-lease or written licence did not preclude input tax recovery, as the Appellant had at least an implied licence to occupy and use the premises for its business. The arrangements were not artificial or VAT-motivated, and the factual reality was that the Appellant was the supplier of the relevant services. Thus, the input tax was deductible.

Citation
[2012] UKFTT 170 (TC)
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), Decision on Appeal
Outcome
Appeal allowed 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), Decision on Appeal

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 sub-lease or licence precludes input tax recovery
  3. 3 How supplies under a licence (not lease) are treated for VAT

Ratio Decidendi

The Tribunal held that the Appellant's capital expenditure was directly and immediately linked to its taxable supplies, as it was the entity incurring the costs, providing the services, and receiving the revenues. The absence of a formal sub-lease or written licence did not preclude input tax recovery, as the Appellant had at least an implied licence to occupy and use the premises for its business. The arrangements were not artificial or VAT-motivated, and the factual reality was that the Appellant was the supplier of the relevant services. Thus, the input tax was deductible.

Court Disposition

Appeal allowed in principle

Orders

  • Input tax deduction on capital costs allowed in principle, subject to quantum and timing to be determined.
  • Issues of quantum and time limits for assessment reserved for later determination.