Defining the supply

The taxpayer provided self-storage facilities via large metal containers on land he owned.

Customers entered into a licence agreement giving them the right to use the containers and to have access them. HMRC said the arrangement was a taxable supply subject to VAT.

The First-tier Tribunal allowed an appeal by the taxpayer’s appeal saying the storage business was a single supply the predominant element of which was the provision of a licence to occupy land.

The supplies were therefore an exempt supply of land under VATA 1994 Sch 9 group 1 item 1.

The Revenue appealed.

The Upper Tribunal had to ascertain the correct classification of the single composite supply which the judge said had to reflect the “economic and social reality” of the supply.

Given the terms of the licence agreement and the evidence in this instance   the supply was the...