SILVERDOOR LIMITED v THE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMS [2024] UKUT 00147 (TCC)
| Jurisdiction | UK Non-devolved |
| Judge | JUDGE PHYLLIS RAMSHAW,JUDGE MARK BALDWIN on |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
| Published date | 24 May 2024 |
Neutral citation: [2024] UKUT 00147 (TCC)
UT (Tax & Chancery) Case Number: UT/2022/000133
Upper Tribunal
(Tax and Chancery Chamber)
Rolls Building, London
VALUE ADDED TAX — whether charges raised by an agent arranging accommodation constituted
consideration for a separate service falling within the exemption for financial intermediaries’
services – Item 5, Group 5, Schedule 9, Value Added Tax Act 1994 – no – appeal dismissed.
Heard on: 14 February 2024
Judgment date: 23 May 2024
Before
JUDGE PHYLLIS RAMSHAW
JUDGE MARK BALDWIN
Between
SILVERDOOR LIMITED Appellant
and
THE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMS
Respondents
Representation:
For the Appellants: David Southern KC, of counsel, instructed by Cripps LLP
For the Respondent: Barbara Belgrano, of counsel, instructed by the General Counsel and Solicitor
for His Majesty’s Revenue and Customs
2
DECISION
Introduction
This is an appeal by SilverDoor Limited (“SilverDoor”) against the decision of the FTT in
SilverDoor Limited v HMRC, [2022] UKFTT 233 (TC) (“the Decision”), in which the FTT dismissed
an appeal by SilverDoor against two assessments for VAT amounting to £109,305.
In very broad outline, as found by the FTT, the arrangements under consideration work like this:
(1) SilverDoor provides services to providers of short-term rentals of hotels, serviced
apartments and similar properties (referred to as “Property Partners”). SilverDoor acts as
disclosed agent for the Property Partners. The accommodation is booked by persons
(“Clients”), which are generally businesses seeking short-term accommodation for employees
on temporary assignments.
(2) SilverDoor charges commissions to Property Partners for the provision of services. Those
services are advertising the accommodation and making reservations of accommodation on
behalf of the Property Partner. When a Client reserves accommodation, SilverDoor collects
payment from the Client on behalf of the Property Partner. This amount is paid by SilverDoor
to the Property Partner after deduction of SilverDoor’s commission.
(3) SilverDoor does not, itself, charge Clients a fee for making reservations of
accommodation unless the Client chooses to pay for the reservation with a corporate credit
card. In such a case, SilverDoor requires that the Client pay an additional fee (“the Fee/s”),
being 2.95% of the accommodation charge.
The VAT assessments under appeal arise in respect of the Fees. HMRC concluded that the Fees
were consideration for a supply of standard rated reservation services.
It is common ground that, where SilverDoor charges a Client a Fee, SilverDoor is making a supply
of services to the Client and the Fee is consideration received from the Client for that supply.
The parties do not agree on (a) the proper characterisation of the supply (we refer to this as the
“Characterisation Issue”)) and (b) whether the supply is exempt pursuant to Item 5 of Group 5 of
Schedule 9 to the Value Added Tax Act 1994 (“VATA”) (we refer to this as the “Exemption Issue”).
On the Characterisation Issue, SilverDoor contends that the Fees are charged in return for it
providing Clients with a facility to pay by corporate card and that this is a separate and distinct supply
from the supply of accommodation, which is made by the Property Partners.
On the Exemption Issue, SilverDoor initially had two arguments. Firstly (the “Principal
Argument”), it said that its actions had the effect of transferring funds for the purposes of the financial
services exemption. Alternatively (“the Intermediaries Argument”), it argued that it brought together
Clients who wished to pay by credit card and the merchant acquirers, with a view to securing payment
by this means, and this was a distinct act of mediation. SilverDoor has abandoned the Principal
Argument, so its argument on the Exemption Issue now rests on the Intermediaries Argument alone.
It is common ground that, in order to be successful in this appeal, SilverDoor must “win” on both
the Characterisation Issue and the Exemption Issue. In other words, SilverDoor must show that the
Fees are consideration for a supply which is separate from any other supply made by SilverDoor (or
the Property Partners) and that this separate supply is exempt from VAT.
Get this document and AI-powered insights with a free trial of vLex and Vincent AI
Get Started for FreeStart Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
Start Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
Start Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
Start Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
Start Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting