Commissioners of Customs and Excise v Westmorland Motorway Services Ltd
| Jurisdiction | England & Wales |
| Judgment Date | 30 January 1998 |
| Date | 30 January 1998 |
| Court | Court of Appeal (Civil Division) |
Court of Appeal
Before Lord Justice Evans, Lord Justice Hutchison and Lord Justice Mantell
VAT - free meals and cigarettes - tax payable on retail price
The supply by a service station of a free meal and a packet of cigarettes or cash in lieu to a coach driver, who brought to the service station 20 or more passengers for a minimum of 30 minutes, was assessable to value-added tax on the retail price, and not the cost price, of the cigarettes or meal supplied.
The Court of Appeal so held in a reserved judgment dismissing the appeal of the taxpayer, Westmorland Motorway Services Ltd, from the decision of Mr Justice Lightman in the Chancery Division (The Times March 4, 1997; [1997] STC 400) allowing the appeal of the Commissioners of Customs and Excise from a decision of a Manchester VAT Tribunal of July 26, 1996, which had allowed the taxpayer's appeal against the commissioners' notice of assessment, of June 20, 1994, in respect of output tax in the sum of £35,608 plus interest of £3,238.
Article 11A of the Sixth Council Directive 77/388/EC of May 17, 1977 on the harmonisation of the laws of the member states relating to turnover taxes: common system of value-added tax: uniform basis of assessment (OJ 1977 L145 p1) provides: "(1) the taxable amount shall be…everything which constitutes the consideration which has been or is to be obtained by the supplier from the purchaser, the customer or a third party for such supplies including subsidies directly linked to the price of such supplies."
Mr William Massey, QC, for the taxpayer; Mr Kenneth Parker, QC, for the commissioners.
LORD JUSTICE HUTCHISON said that the taxpayer did not dispute its liability to pay output tax, but contended that a much smaller sum was due in respect of the periods covered by the assessment.
The taxpayer, in essence, provided drivers of coaches carrying 20 or more passengers, who stopped for not less than 30 minutes, with a free meal and a free packet of cigarettes or a sum of money in lieu. The advantage to the taxpayer was the custom it expected to obtain from the coach passengers.
It was common ground:
1 That the provision of the meal and the cigarettes (but not the money in lieu: the provision of money was not the supply of goods or services, and so no question of charging VAT arose in relation to the payments in lieu) constituted a taxable supply...
To continue reading
Request your trial
-
Lex Service Plc v Commissioners of Customs and Excise
...to spend. 22 The Court of Appeal considered these authorities in Customs & Excise Commissioners v Westmorland Motorway Services Limited [1998] STC 431. Westmorland ran motorway service stations. Its practice, known to coach drivers, was to provide, without payment, a packet of cigarettes an......
- Lex Services Plc v Commissioners of Customs and Excise
- Riverside Sports & Leisure Ltd v Commisioners for HM Revenue and Customs
-
Commissioners of Customs and Excise v Littlewoods Organisation Plc
...Group Ltd v Customs and Excise Commissioners [1997] STC 811 and Customs and Excise Commissioners v Westmorland Motorway services Ltd [ 1998] STC 431. 25 In the Rosgill case the taxable supplier sold ladies and children's clothing by the 'party plan' method. As a reward for holding a party t......