VAT registration ― artificial separation of business activities ― relevant case law

Produced by Tolley
VAT registration ― artificial separation of business activities ― relevant case law

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • VAT registration ― artificial separation of business activities ― relevant case law
  • VAT Tribunal cases
  • Examples of single businesses
  • Smith t/a Ty Gwyn Hotel v Customs and Excise Comrs
  • Essex t/a Essex Associates v Customs and Excise Comrs
  • Surreal Hair
  • Salmon Tail
  • Examples of separate businesses
  • Skelton Waste Disposal v Customs and Excise Comrs
  • Townsend v Customs and Excise Comrs
  • More...

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant changes began to take effect across the UK’s VAT and customs regime. This document contains guidance on subjects potentially impacted by these changes. Before continuing your research, see the Brexit — overview guidance note.

VAT Tribunal cases

It is always useful to consider the views of the higher courts on subjects where the issues are not clear cut. The separation of business activities has yielded a number of interesting and significant cases. This guidance note provides some real-world examples of cases which looked at whether businesses run by associated people (often husbands and wives) were separate businesses or a single business.

For discussion of artificial separation of businesses generally, see the VAT registration ― artificial separation of business activities guidance note.

Examples of single businesses

Smith t/a Ty Gwyn Hotel v Customs and Excise Comrs

Mrs Smith ran the catering part of the business, but the only payment she made to her husband towards the facilities she enjoyed was to provide free sandwiches to pub customers on a Thursday night. It was argued by the Smiths that this was her way of paying for the kitchen and equipment facilities that she enjoyed on the hotel premises.

However, HMRC successfull

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