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You are here: BAILII >> Databases >> First-tier Tribunal (Tax) >> Glamorgan Prestige Developments Ltd v Revenue & Customs [2010] UKFTT 237 (TC) (24 May 2010) URL: http://www.bailii.org/uk/cases/UKFTT/TC/2010/TC00536.html Cite as: [2010] UKFTT 237 (TC) |
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[2010] UKFTT 237 (TC)
TC00536
Appeal number: TC/2009/09780
VAT – Disallowance of Input tax – Whether VAT on services supplied more than six months before registration – Yes – Appeal dismissed – Regulation 111 VAT Regulations 1995
FIRST-TIER TRIBUNAL
TAX
GLAMORGAN PRESTIGE DEVELOPMENTS LIMITED Appellant
- and -
TRIBUNAL: JOHN BROOKS (TRIBUNAL JUDGE)
WILLIAM HAARER (MEMBER)
Sitting in public at Eastgate House, Cardiff on 10 May 2010
Mr N Bevan, accountant for the Appellant
Mrs G Orimoloye of HM Revenue and Customs, for the Respondents
© CROWN COPYRIGHT 2010
DECISION
1. Glamorgan Prestige Developments Limited (the “Company”) appeals against a decision of HM Revenue and Customs (“HMRC”) to disallow £1,916.83 claimed as input tax in respect of various items in the Company’s first VAT return on the basis that it related to VAT on services supplied to the Company over six months before it was registered for VAT.
2. Until such time as a person is registered, or required to be registered, for VAT there is no entitlement to a credit for input tax on supplies received. However, Regulation 111 of the VAT Regulations 1995 provides for an exception to this general rule and allows for VAT on the supply of goods and services provided to a person, within 4 years in the case of goods and within six months in the case of services, before the date from which he was registered, or required to be registered, for VAT to be treated “as if it were input tax”.
3. As it was accepted, by Mr Bevan on behalf of the Company, that the various items had been supplied more than six months before it was registered for VAT, the issue for us to determine was whether these items were goods or services.
4. The facts which gave rise to this appeal are not disputed.
5. The Company, which was registered for VAT from 1 December 2008, was established to develop a single property, a barn conversion, for resale. As its first VAT return, for the period to 31 January 2009, was a ‘repayment’ return it was referred to the Local Compliance Small and Medium Enterprises office of HMRC for verification where it was dealt with by Mrs Karen Govier, who gave evidence before us.
6. Mrs Govier explained that she requested and received further information from the Company which she found to include items that related to services provided to the Company more than six months before it was registered for VAT. She therefore disallowed the Company’s input tax claim made in respect of these items.
7. The items on which the claim for input tax was disallowed are as follows:
Supplier Detail Date Ref Total VAT Net
CBL Hire 19/09/07 111 536.53 79.91 456.62
A Davies Travel 19/09/07 116 202.53 30.10 172.03
Davies Skips Waste 19/09/07 118 621.58 92.58 529.00
O2 Phone 23/10/07 130 29.00 4.32 24.68
Davies Skips Waste 23/10/07 133 739.08 110.08 629.00
O2 Phone 11/11/07 140 30.29 4.51 25.78
CBL Hire 12/11/07 141 1931.70 287.70 1644.00
Brandon Hire Hire 29/11/07 144 204.88 30.51 174.37
Davies Skips Hire 29/11/07 145 235.00 35.00 200.00
O2 Phone 09/12/07 147 28.00 4.17 23.83
Swalec Power 20/12/07 150 184.39 8.78 175.61
O2 Phone 08/01/08 154 28.00 4.17 23.83
CBL Hire 25/01/08 156 1719.95 256.16 1463.79
Davies Skips Waste 25/01/08 157 188.00 28.00 160.00
Brandon Hire Hire 25/01/08 158 978.56 145.74 832.82
O2 Phone 07/03/08 164 31.03 4.62 26.84
Swalec Power 13/03/08 166 364.63 17.36 347.27
CBL Hire 03/04/08 172 834.25 124.25 710.00
Brandon Hire Hire 03/04/08 173 408.77 60.88 347.89
Davies Skips Waste 03/04/08 174 405.38 60.38 345.00
O2 Phone 12/04/08 177 28.47 4.24 24.23
CBL Hire 18/04/08 179 2179.65 324.63 1855.02
CBL Hire 13/05/08 184 1305.93 194.50 1111.43
O2 Phone 13/05/08 185 28.44 4.24 24.20
Total disallowed 1916. 83
8. Mr Bevan, for the Company submitted that these items, which he described as “not tangible moveable property”, were not services but “costs ancillary to goods” or “expenditure ancillary to goods that have been incorporated into a single stock asset held at the [VAT] registration date and not services related to any output made prior to the registration date.” He sought to clarify his submission by way of an example, contending that a person who fits wheels to car is not providing a service to the car manufacturer as the fitting of the wheels is part of the production of the car.
9. Mrs Orimoloye, for HMRC, contended that the items concerned were not goods but services supplied to the Company more than six months before the date of its VAT registration and therefore it should not be treated as input tax. She referred us to s. 5(2) VAT Act 1994 which provides that “anything which is not a supply of goods but is done for a consideration … is a supply of services.”
10. Having carefully considered the evidence and submissions made on behalf of the parties we find that the items in respect of which the claim for input tax was disallowed to have been services. As these were supplied to the Company more than six months before the date of its registration for VAT they cannot be treated as input tax and were correctly disallowed.
11. The appeal is therefore dismissed
12. This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice.