Daynes and Another
| Jurisdiction | UK Non-devolved |
| Judgment Date | 11 August 1993 |
| Date | 11 August 1993 |
| Court | Value Added Tax Tribunal |
VAT Tribunal
Output tax - Recovery of overpaid tax - Taxable person - Two businesses carried on under one registration - One business claimed by appellant to be below registration threshold although tax accounted for - Whether overpaid tax recoverable - Unjust enrichment - Finance Act 1989 section 24Finance Act 1989, s. 24.
The issue was whether output tax accounted for by the appellants to the commissioners, allegedly in error, could be recovered.
The appellants, a husband and wife partnership, purchased the Clachaig Inn and registered for tax as a hotel business in 1984. Later that year they purchased a group of chalets for the purpose of hiring them out to the public. When in May 1988 their son G became a partner an agreement was drawn up to the effect that the partnership was not to extend to the chalet business. However, for VAT purposes the registration of the entire business continued without variation and the appellants accounted for output tax, charging tax to the hirers of the chalets as well as customers of the hotel and claiming input tax on supplies made to the business. In May 1990 a further son, E, was brought into the hotel business as a partner.
In 1992 the appellants wrote to the commissioners claiming that there were in effect two separate businesses and that as the chalet business was operated below the threshold for registration it had erroneously paid output tax on supplies made by it so that they were eligible for repayment of the tax paid.
In support of this contention they stated that there were separate profit and loss accounts and assessments for rating purposes for each entity, separate, although similar, brochures and although there was one set of books it was split into divisions for the separate "businesses". The hotel made a management charge for bookings and collecting accounts from chalet customers. Output tax was charged on an inclusive basis, with the appropriate percentage being paid to the commissioners. The appellants claimed that as the hire charge was "the going rate" they were effectively paying this amount to the commissioners out of their profits.
Held, dismissing the taxpayers' appeal:
1. It could not be said on the facts that there were two separate businesses during the period in question. There was only one registration for all the activities and, in fact, the appellants should have intimated each change of partnership to the commissioners within 30 days of the new partnership...
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National Provincial Building Society
...LtdUNK(1994) 69 CLR 51 Computeach International Ltd VAT(MAN/91/1224) No. 12,115; [1995] BVC 931 Daynes VAT(EDN/93/16) No. 10,988; [1994] BVC 664 Hans Just I/S v Danish Ministry for Fiscal Affairs (Case 68/79) [1980] ECR 501 Lamdec Ltd VAT(LON/90/1018) No 6078; [1991] BVC 721 Rewe-Zentralfin......