W Resources PLC v Revenue & Customs (VAT - REGISTRATION : Cancellation of) [2018] UKFTT 746 (TC) (18 December 2018)

W Resources PLC v Revenue & Customs (VAT - REGISTRATION : Cancellation of) [2018] UKFTT 746 (TC) (18 December 2018)

The Tribunal held that the appellant was carrying on an economic activity and making supplies for a consideration to its subsidiaries to the extent that its right to invoice for services was no longer contingent on the generation of revenues by the recipients. Where the obligation to pay existed, even if payment was deferred, the supply was for a consideration and the appellant was entitled to VAT registration and input tax deduction. However, vague intentions or contingent arrangements did not suffice.

Citation
[2018] UKFTT 746
Parties
Appellant: W Resources PLC; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
18 December 2018
Procedural Posture
VAT Appeal / First Tier Tribunal Decision
Outcome
Appeal allowed in part
Legal Topics
VAT Registration, VAT Input Tax Deduction, Economic Activity, Supply for Consideration, Management Services by Holding Companies
Tax Law VAT VAT Registration VAT Input Tax Deduction Economic Activity Supply for Consideration Management Services by Holding Companies

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 15 Party arguments 2 Amounts and remedies 4
Sign in to unlock

Parties

W Resources PLC

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

VAT Appeal / First Tier Tribunal Decision

Legal Issues

  1. 1 Whether the appellant was carrying on an economic activity for VAT purposes
  2. 2 Whether supplies to subsidiaries were made for a consideration
  3. 3 Entitlement to VAT registration and input tax deduction

Ratio Decidendi

The Tribunal held that the appellant was carrying on an economic activity and making supplies for a consideration to its subsidiaries to the extent that its right to invoice for services was no longer contingent on the generation of revenues by the recipients. Where the obligation to pay existed, even if payment was deferred, the supply was for a consideration and the appellant was entitled to VAT registration and input tax deduction. However, vague intentions or contingent arrangements did not suffice.

Court Disposition

Appeal allowed in part

Orders

  • VAT registration to be reinstated to the extent appellant made supplies for a consideration and carried on an economic activity
  • Input tax deduction allowed for periods where supplies were made for a consideration