Next Group Plc v Revenue & Customs [2011] UKFTT 122 (TC) (16 February 2011)

Next Group Plc v Revenue & Customs [2011] UKFTT 122 (TC) (16 February 2011)

The Brochure was not supplied for consideration; the charge and delivery credit were a marketing device and cancelled each other, so no genuine payment was made for the Brochure. The payment received was consideration for the taxable supply of delivered goods. The arrangements were not abusive as the principal aim was commercial, not tax avoidance. Some VAT assessments were out of time as the necessary evidence was in HMRC's possession more than a year before assessment.

Citation
[2011] UKFTT 122
Parties
Appellant: Next Group plc; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
16 February 2011
Procedural Posture
VAT Appeal (first Tier Tribunal Tax) / Final Judgment After Consolidated Appeals
Outcome
Appeal allowed in part
Legal Topics
VAT Consideration, Zero Rating, Supply for Consideration, Abuse of Rights, Time Limits for Assessment
Tax Law Value Added Tax VAT Consideration Zero Rating Supply for Consideration Abuse of Rights Time Limits for Assessment

Case Brief

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Parties

Next Group plc

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

VAT Appeal (first Tier Tribunal Tax) / Final Judgment After Consolidated Appeals

Legal Issues

  1. 1 Whether the contingent charge for the Brochure constituted consideration for a zero-rated supply under VAT law
  2. 2 Whether the arrangements were abusive for VAT purposes
  3. 3 Whether the VAT assessments were made within the statutory time limits

Ratio Decidendi

The Brochure was not supplied for consideration; the charge and delivery credit were a marketing device and cancelled each other, so no genuine payment was made for the Brochure. The payment received was consideration for the taxable supply of delivered goods. The arrangements were not abusive as the principal aim was commercial, not tax avoidance. Some VAT assessments were out of time as the necessary evidence was in HMRC's possession more than a year before assessment.

Court Disposition

Appeal allowed in part

Orders

  • VAT assessments upheld except for those found to be out of time
  • Assessments for periods where evidence was in HMRC's possession more than a year before assessment are discharged