Recent Cases

A1 Lofts Ltd v Revenue and Customs Commissioners

This case concerned the determination of whether the taxpayer was liable to pay VAT for the supply of building services by fitters, roofers, and other tradesmen. The taxpayer claimed that it was merely a project manager and the services were supplied directly to the client whereas HMRC claimed that the tradesmen were in a sub-contracting relationship with the taxpayer and thus was liable to charge VAT on all the tradesmen’s bills. The VAT Tribunal held that in determining this central issue, it was entitled to take a holistic test taking into account the perception of customers and all relevant factors. On appeal, Lewison J held that such was not correct and in agreeing with the taxpayer’s submissions, said that the correct approach was to consider the incidence of liability by reference to the contractual provisions and only to depart from those if the contracts were sham or departed from in practice.