Single or multiple supply?

The taxpayer owned a barn which she rented out as The Play Barn. It resembled a sports hall with pitches marked out on the floor. It also contained a small reception area a dining room and other facilities.

The taxpayer used the barn to hold children’s parties which included refreshments use of play equipment and other services. The cost for each child was fixed and included the refreshments. The taxpayer claimed repayments of VAT but HMRC refused.

The First-tier Tribunal allowed the taxpayer’s appeal so HMRC appealed to the Upper Tribunal (Tax and Chancery Chamber).

The court said it was settled law that where a transaction involved more than one supply neither of which was ancillary to the other the correct tax treatment depended on whether viewed objectively they formed a single indivisible economic supply that it would...