In Peter Tomlinson v HMRC [2007] UKVAT V20059 the VAT tribunal agreed with HMRC that an internet salesman was carrying on a business of buying and performance enhancing pills was not acting as disclosed agent for a Doctor.

  • The taxpayer registered for VAT on 1 April 2000 and advertised pills on the internet.
  • On completion of questionnaires, the order was passed to a Doctor.

  • The Doctor prescribed pills to the customers and arranged for a pharmacist to send them to the customers.

  • From 1 March 2001, the Doctor began to supply the pills direct to the customers.

  • The taxpayer paid the Doctor for the pills.

  • The taxpayer issued the customer an invoice with a mark-up.

HMRC conducted a review in October 2004:

  • HMRC agreed to treat the supplies until 1 March 2001 as zero-rated.

  • The supplies by the Doctor were disbursements until 1 March 2001 and he was acting as agent for the taxpayer.

  • This meant that the taxpayer could not recover VAT on the purchases and did not need to charge VAT to its customers.

  • From 1 March 2001, the supplies were standard rated:

    • There was no registered pharmacist involved

    • The taxpayer could recover VAT on the purchases of pills from the Doctor who was now supplying the pills directly and so incapable of acting as agent for the taxpayer.

The taxpayer appealed on the basis that he did not have a business for VAT: 

  • He was acting as agent for the Doctor and was not employed by the Doctor.

  • He never handled the pills.

  • His supplies should be outside scope. 

Neither the taxpayer, nor a representative attended the tribunal, leaving HMRC to argue the case unopposed. The VAT Tribunal agreed with HMRC: 

  • The taxpayer was clearly operating a business.

  • He was acting as undisclosed agent for the Doctor.

  • For VAT purposes, undisclosed agents are treated as receiving and making the supplies personally.

  • The supplies were standard rated from 1 March 2001. 

As the taxpayer did not have a sufficient explanation for failing to attend, the Tribunal also awarded costs to HMRC. 



Registering for VAT

Case: Peter Tomlinson v HMRC [2007] UKVAT V20059