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)

The Tribunal found that the yacht chartering was not carried out as a serious business or economic activity. The lack of appropriate insurance, MCA coding, business planning, and the personal nature of the use and relationships indicated that the activity was not a business for VAT purposes. Therefore, OCL was not entitled to VAT registration or input tax reclaim.

Citation
[2011] UKFTT 854
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), Final 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), Final 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

The Tribunal found that the yacht chartering was not carried out as a serious business or economic activity. The lack of appropriate insurance, MCA coding, business planning, and the personal nature of the use and relationships indicated that the activity was not a business for VAT purposes. Therefore, OCL was not entitled to VAT registration or input tax reclaim.

Court Disposition

Appeal dismissed

Orders

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