Payments in advance

In October 2007 the taxpayer business began providing training courses on emergency medicine for postgraduate doctors.

The students were required to pre-pay for the courses because the taxpayer did not otherwise have the finance to organise the events. Courses were run only if there was sufficient support although it had not been necessary to cancel any.

The director said the aim of the business was to meet a need in the market rather than be commercial. He had not taken any payment but the accounts were in profit.

The director claimed that on accounting principles the payments could not be recognised as income until the relevant courses had taken place.

He contended that on this basis the business did not reach the threshold for VAT registration until November 2008. HMRC said the threshold was reached in September 2008.

The First-tier Tribunal decided that accepting...