Ocean Charters Ltd v Revenue & Customs [2011] UKFTT 854 (TC) (21 December 2011)

Ocean Charters Ltd v Revenue & Customs [2011] UKFTT 854 (TC) (21 December 2011)

OCL was not carrying on an economic activity or business for VAT purposes. The yacht was not used in a manner consistent with a genuine business: there was no MCA coding, no commercial insurance, no structured business plan, and the charters were mainly for the benefit of Mr Wylie and his associates. The evidence pointed to personal rather than commercial use. Therefore, OCL was not entitled to VAT registration or to reclaim input VAT.

Citation
[2011] UKFTT 854 (TC)
Parties
Appellant: Ocean Charters Ltd; Respondents: The Commissioners for Her Majesty's Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
21 December 2011
Procedural Posture
VAT Appeal / First Tier Tribunal (tax) Decision
Outcome
Appeal dismissed
Legal Topics
VAT Registration, Input Tax Reclaim, Economic Activity, Business Purpose, Yacht Charter
Tax Law VAT VAT Registration Input Tax Reclaim Economic Activity Business Purpose Yacht Charter

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Parties

Ocean Charters Ltd

Appellant

The Commissioners for Her Majesty's Revenue & Customs

Respondents

Procedural Posture

VAT Appeal / First Tier Tribunal (tax) Decision

Legal Issues

  1. 1 Whether Ocean Charters Ltd was carrying on an economic activity for VAT purposes
  2. 2 Whether the yacht chartering constituted a business entitling input VAT reclaim
  3. 3 Whether the VAT registration and input tax claim were valid

Ratio Decidendi

OCL was not carrying on an economic activity or business for VAT purposes. The yacht was not used in a manner consistent with a genuine business: there was no MCA coding, no commercial insurance, no structured business plan, and the charters were mainly for the benefit of Mr Wylie and his associates. The evidence pointed to personal rather than commercial use. Therefore, OCL was not entitled to VAT registration or to reclaim input VAT.

Court Disposition

Appeal dismissed

Orders

  • Decision of HMRC to refuse VAT reclaim and deregister OCL for VAT is confirmed.