Was a lease agreement for parking vehicles a licence to occupy land?

The taxpayer rented out the car park at its trading premises to a tenant which traded as a car wash business. It treated the income as exempt from VAT as a licence to occupy land. This was important because it was likely that the tenant traded below the registration threshold and could not claim input tax. HMRC concluded that the income was standard rated because it was a car park being rented out. The fact that the tenant used it for a different purpose was irrelevant - they could still use it as a car park if they wished. HMRC raised an assessment and the taxpayer appealed.

The taxpayer said the fact it was a car park was irrelevant because parking facilities were not being provided. HMRC dismissed this argument and pointed to the contract between the tenant and landlord which included many references to a ‘car park’...