Secret supply

The taxpayer company operated a website through which it marketed hotel accommodation in the Mediterranean and the Caribbean. Most sales were made to travel agents acting on behalf of holidaymakers.

In effect the holidaymaker made two separate contracts: one with Secret Hotels2 relating to the use of the website and the other with the accommodation provider.

HMRC said the company was acting as principal when making the supplies of holiday accommodation and was liable to account for VAT.

The company appealed saying it made the supplies as agent for the hotel operator; thus the supplies were treated as taking place in the jurisdiction in which the hotel was located and were outside the scope of the UK.

The First-tier Tribunal found for HMRC so the company appealed.

The Upper Tribunal (Tax and Chancery...