»Ê¹ÚÌåÓýapp

Eddystone Computers Ltd VTD 11018
Peugeot Motor Co plc VTD 16731
Rainheath Ltd VTD 1249
Telecential Communications Ltd VTD 15361

Please note that the following material is not a full summary of the case - it merely highlights the principle referred to in the appropriate section of this manual.

Eddystone Computers Ltd VTD 11018

A company which carried on a computer consultancy business bought a microlight aircraft. »Ê¹ÚÌåÓýapp tribunal held that the aircraft had been bought for the pleasure of the company’s managing director. »Ê¹ÚÌåÓýapprefore input tax was not deductible.

Peugeot Motor Co plc VTD 16731

»Ê¹ÚÌåÓýapp company gave out tickets to football matches and motor races under a staff incentive scheme. »Ê¹ÚÌåÓýapp tribunal accepted that the company had made the supplies for the purposes of its business so that the provision in article 3 of the VAT (Supply of Services) Order 1993 was not met.

»Ê¹ÚÌåÓýapp tribunal found that the scheme had proved successful in reducing absenteeism. »Ê¹ÚÌåÓýapp scheme had also encouraged the submission of ideas to improve efficiency. On the evidence the tribunal found that the company acted for purely business reasons. »Ê¹ÚÌåÓýapp tribunal held that the personal benefit derived by its employees was of secondary importance compared to the needs of its business.

Top of page

Rainheath Ltd VTD 1249

A company which carried on a pig farming business bought a yacht. »Ê¹ÚÌåÓýapp yacht was used by directors of the company and their families. It was also let on hire.

»Ê¹ÚÌåÓýapp tribunal rejected the company’s argument that it was carrying on a separate business of chartering. It held that in view of the small number of lettings, the limited nature of advertising, and the company’s selectivity in accepting hirers the hiring of the yacht was not a business. »Ê¹ÚÌåÓýapp tribunal observed that evidence of performance is to be preferred to the evidence of intent where the latter is unaccompanied by performance. No input tax could therefore be recovered on the purchase of the yacht.

Top of page

Telecential Communications Ltd VTD 15361

»Ê¹ÚÌåÓýapp company provided telecommunications and cable television services. It gave its employees free connections to its cable television and telephone networks.

»Ê¹ÚÌåÓýapp tribunal held that the company should pay output tax under the VAT (Supply of Services) Order 1993. »Ê¹ÚÌåÓýapp tribunal recognised that the supplies brought some incidental benefits to the company. However, it held that the company’s relevant purpose was a non-business purpose. That purpose was to provide all employees who were in a position to make use of them with the benefit of cable television and free line rental at home.