Supplies subject to UK VAT

The taxpayer couple ran a hotel on the Isle of Wight. Some visitors made direct reservations while others booked through a travel agent.

The taxpayers’ VAT returns were completed until autumn 2011 on the basis all the accommodation supplies were standard rated.

The taxpayer claimed a refund in October 2011 of the VAT accounted for on supplies to foreign travel agents. HMRC made the repayment but then reclaimed it saying it had been repaid wrongly.

The taxpayers appealed. They argued the legislation was complex and that even some Revenue officers were confused about the correct treatment of supplies to agents based outside the EU.

The First-tier Tribunal said the law provided the couple’s supply of hotel accommodation took place in the UK regardless of whether supplied to an individual a UK-based business or a business outside the UK. The supply was liable to standard-rated VAT.

There...