VAT: supplies to director valued on same basis as BIKs

The First Tier Tribunal has ruled that the VAT value of a supply of a company’s supplies to its director should be a cost rather then open market value.

A company held shoots on its land, and its director was fond of shooting and took advantage of his office, so it declared a taxable benefit on the director’s P11D. The value for benefit in kind purposes was declared (correctly for P11D purposes) as being the cost to the company which came to £1,000. 

During a Vat inspection HMRC assessed the value of the shoots to be the open market value of £8,000 per shoot and arrived at a VATable benefit of £96,000 for the year. Abbey Tax’s Senior Vat Consultant, Nigel Ferrington, who represented the company in its appeal was successful in arguing that the value of the supply of game shoots should be valued at cost rather than open market value.