Trans Medium Ltd (t/a Connectivity) v Revenue & Customs [2009] UKFTT 243 (TC) (22 September 2009)

Trans Medium Ltd (t/a Connectivity) v Revenue & Customs [2009] UKFTT 243 (TC) (22 September 2009)

The Appellant, despite a memorandum clause prohibiting profit distribution, was found to pursue the aim of making profits for the benefit of its directors, who received significant remuneration. This remuneration was deemed a distribution of profit, preventing the Appellant from qualifying as an 'eligible body' for VAT exemption under Group 6, Schedule 9, VAT Act 1994.

Citation
[2009] UKFTT 243 (TC)
Parties
Appellant: Trans Medium Limited (t/a Connectivity); Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
22 September 2009
Procedural Posture
VAT Appeal / First Tier Tribunal Decision
Outcome
Appeal dismissed
Legal Topics
VAT Exemption, Eligible Body Definition, Education Services, Profit Distribution
Tax Law VAT VAT Exemption Eligible Body Definition Education Services Profit Distribution

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Parties

Trans Medium Limited (t/a Connectivity)

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

VAT Appeal / First Tier Tribunal Decision

Legal Issues

  1. 1 Whether the Appellant qualifies as an 'eligible body' for VAT exemption under Group 6, Schedule 9, VAT Act 1994
  2. 2 Whether directors' remuneration constitutes distribution of profit preventing eligibility

Ratio Decidendi

The Appellant, despite a memorandum clause prohibiting profit distribution, was found to pursue the aim of making profits for the benefit of its directors, who received significant remuneration. This remuneration was deemed a distribution of profit, preventing the Appellant from qualifying as an 'eligible body' for VAT exemption under Group 6, Schedule 9, VAT Act 1994.

Court Disposition

Appeal dismissed

Orders

  • Appeal against compulsory VAT registration is dismissed.