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05 July 2013
Issue: 4410 / Categories: Tax cases , VAT

Colaingrove Ltd (TC2534)

The taxpayer company had a contract with the publisher of The Sun newspaper News International under which it provided discounted accommodation to readers who took part in promotional offers.

They could stay in a static caravan or a chalet at one of the holiday parks operated by the taxpayer. They reimbursed The Sun for the accommodation but paid the taxpayer for power.

The company claimed the supply of power should be taxed at the reduced rate of VAT on the basis it was domestic use. HMRC said the rate should be the standard because the charges for power and caravan or chalet formed a single supply of holiday accommodation.

The First-tier Tribunal accepted the taxpayer’s argument that had the holidaymakers been permitted to make their own arrangements regarding power supplier they would have been subject to VAT at the lower rate.

It went against fiscal neutrality...

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