V2.203A The meaning of business—the European perspective and the evolution of case law
This paragraph examines the European perspective on what is an economic activity and the influence that this has had on the understanding of 'business' for UK VAT purposes. Despite the UK's departure from the EU and the end of the Brexit implementation period on 31 December 2021 (known as IP completion day) it appears that this European perspective (which has fundamentally influenced the UK courts) remains of great importance.
For an overview of VAT and business more broadly, see V2.201B.
To put the UK's rules in their original European context, for the purposes of Archived Directive 2006/112/EC (ie the VAT Directive as it stood at IP completion day, namely 11pm on 31 December 2020) VAT is concerned with any person who 'independently carries out … any economic activity … whatever the purpose or results of that activity'1. Such a person is known as a 'taxable person' in European parlance. It should be noted that this phrase is also used in UK legislation to mean a person who is, or should be, registered for VAT. In this section, the sense in which the phrase is used will be made clear where there might otherwise be doubt.
The economic activities referred in Archived Directive 2006/112/EC 'comprise all activities of producers, traders and persons supplying services … and activities of the professions. The exploitation of tangible or intangible property for the purpose of obtaining income therefrom on a continuing basis shall in particular