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Reduced rate refused

23 March 2015
Issue: 4494 / Categories: Tax cases , VAT

CRC v Colaingrove Ltd, Upper Tribunal

The taxpayer company provided discounted holiday accommodation to readers of The Sun who took part in promotional offers.

Participants stayed in static caravans and chalets at holiday parks operated by the taxpayer. They paid the newspaper for the accommodation and the taxpayer for electricity.

HMRC said the power was part of the company’s supply of fully serviced holiday accommodation and should be treated as a composite or fused single supply liable at the standard rate of VAT.

The business appealed claiming the electricity was separate from the accommodation and the two supplies should be treated separately – or if the power was part of a single complex supply it constituted a “concrete and specific” element of a wider supply and be should be taxed at the reduced rate under VATA 1994 sch 7A group 1

The First-tier Tribunal disagreed with the taxpayer’s first argument...

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