Tax cases

Separate supplies

Telewest Communications provided a package which comprised of television services and a magazine. It wanted to change the mechanics behind the package so that one company made the taxable supplies of television services and a separate company would supply the magazine a zero-rated supply. It went ahead and did this telling existing customers by a notice in the magazine that the magazine would be supplied by a new company. New customers had to agree on subscribing to the television service to receive the magazine from the new company as part of that service.
Customs told Telewest that either it or the new company was liable to VAT at the standard rate on the supply of the magazine. The tribunal disallowed the taxpayer's appeal as did the High Court.
Customs argued that there could have been no substitution of a new contract...