One-off deal is a business

The taxpayer introduced his friend’s London property to a buyer who agreed to pay £43m provided contracts were exchanged within 48 hours. The vendor paid a substantial commission for the taxpayer’s role in the transaction.

HMRC said VAT was due on the service and the taxpayer should have registered for VAT.

The taxpayer appealed.

The First-tier Tribunal accepted there had been an informal arrangement between the taxpayer and the seller but “it was very clear” a handshake deal would result in a payment to the taxpayer.

The parties to the transaction acted in a business-like way; the taxpayer expected to earn a fee from the provision of a service to the seller and was acting in the course of a business.

The taxpayer’s appeal was dismissed.

Independent VAT consultant Neil Warren noted the tribunal’s comment that the fee must relate to an “economic activity” because “the appellant’s activity...