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In Cowdenbeath Taxi Services Limited v HMRC [2021] UKFTT 43 TC/2018/01656, the First Tier Tribunal (FTT) concluded VAT was not due on services between the companies and the Error Correction Notice submitted was sufficient to make a claim for the repayment of VAT.

Cowdenbeath Taxis provided car rental, telephony services and fuel to the related companies, the ‘Fife Companies’ which in turn provide taxi services. This appeal has been a long-running dispute between Cowdenbeath Taxis and HMRC as to what services are provided and who should account for VAT.

In this appeal, Cowdenbeath Taxis stated it had accepted HMRC’s position that Cowdenbeath Taxis acted as a principal in providing services to the Fife Companies that were used to provide the taxi services.

The FTT considered that HMRC's case appeared contradictory in that if Cowdenbeath Taxis provided the car hire, telephony and fuel services to the Fife Companies to enable the Fife Companies to provide taxi services, Cowdenbeath Taxis cannot also be providing such taxi services to those third parties.

Useful guides on this topic

VAT: Groups
VAT grouping allows two or more 'UK bodies corporate' to be treated as a single person for VAT if certain conditions are met.

Reclaims and unjust enrichment
Claims for VAT repayments can be made by a VAT registered business that has under-claimed input VAT on purchases or over-paid output VAT on sales.

Goods or services for VAT?
What are goods and what are services for VAT? The answer may have an impact on the time of supply, the place of supply and in some cases the rate of the supply. The answer is not always as straightforward as it may seem.

External Link

Cowdenbeath Taxi Services Limited v HMRC [2021] UKFTT TC/2018/01656


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