Manchester Ship Canal Company v Commissioners of Customs and Excise
| Jurisdiction | England & Wales |
| Judgment Date | 18 February 1982 |
| Date | 18 February 1982 |
| Court | Queen's Bench Division |
Queen's Bench Division.
Mr. R. Ham (instructed by Messrs. le Brasseur & Bury, Agents for Messrs. Grundy Kershaws) for the company.
Mr. Simon Brown (instructed by the Solicitor for the Commissioners of Customs and Excise) for the Crown.
Before: Hodgson J.
Value added tax - Payments of VAT made to actuaries for reports and advice in relation to pension funds - Whether company entitled to treat payments as input tax - Whether reports and advice supplied to company for purposes of business carried on by it - Whether reports on actuarial solvency supplied to fund committees rather than to company for purpose of its business - section 3Finance Act 1972 - sec. 3.
This was an appeal by the company from a decision of the Tribunal which found that actuarial reports on the solvency of two pension funds set up for employees of the company were supplied to the committees of those funds and so were not supplied to the company. For the company to be entitled to treat payments of VAT made by them in connection with the supply of those reports as input tax under section 3sec. 3 of the Finance Act 1972 it was necessary for the supply to have been made for the purposes of its business.
Three pension funds were in existence for the company's employees. All the funds for the schemes came from the company and the beneficiaries. In each case the company had a duty to ensure that the funds were at all times actuarially solvent. Each fund had a management committee with specified powers and duties in relation to the funds.
The rules of two of the funds required that the actuary should report to the committee.
Held, appeal allowed.
The supply of advice about actuarial insolvency was clearly made to the company and related to a matter which was part of the management concern of the company. The mere fact that, under the rules, the reports had to go to the committee does not alter the fact that the advice was for the purposes of the business carried on by the company.
Hodgson J.: This appeal is brought under the Tribunals and Inquiries Act 1971 against the decision of a Value Added Tax Tribunal sitting in Manchester made on 5th June 1981. The Tribunal held that the Appellant company was not entitled to treat as input tax for the purposes of section 3sec. 3 of the Finance Act 1972 payments of VAT made by the Appellants to a firm of Consulting Actuaries in respect of actuarial reports and advice which the Appellants contended were supplied to them for the purposes of the business carried on by them.
The documentation prepared for this appeal runs to well over 300 pages and the decision of the Tribunal spans 17 of them. I think however that this vast accumulation of material probably conceals a jurisprudential mouse.
The Manchester Ship Canal Company (which I shall call "the Company") is a statutory company whose powers and duties are contained in theManchester Ship Canal Acts and Orders 1885 to 1970 and theCompanies Clauses Act 1845. It is registered for the purpose of VAT.
Under statutory powers three pension funds have been set up. They are, in historical order: (1) The Staff Superannuation Scheme, which as its name implies provides pensions for the salaried staff; (2) The Retirement Benefits Fund, which supplements The Staff Superannuation Scheme and...
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