Queenscourt Limited v The Commissioners for HMRC
[2024] UKFTT 460 (TC)
Gap Group Limited v The Commissioners for HMRC
2 November 2023
[2023] UKFTT 970 (TC)
First-tier Tribunal
GAP rents out construction equipment. HMRC said the fuel in the equipment was part of the rental, so GAP owed more VAT. The judge disagreed, saying the fuel was a separate sale that only happened if the customer returned the equipment with less fuel than it started with. GAP won, and doesn't have to pay the extra VAT.
Key Facts
- •GAP Group Limited (Appellant) appealed HMRC's VAT assessment of £844,909.
- •The dispute centered on whether the supply of red diesel fuel with plant hire was a single composite supply or multiple supplies.
- •HMRC argued it was a single, standard-rated supply.
- •GAP argued it was multiple supplies: standard-rated plant hire and reduced-rate fuel (below the de minimis threshold).
- •GAP's alternative argument: if a single supply, the fuel element should still attract the reduced rate.
- •GAP's business model involved various customer types (Major Accounts, Regional Customers, Bespoke Customers) with differing contractual arrangements.
- •Fuel was usually supplied with the plant but invoiced separately only if the tank wasn't refilled on return.
- •GAP's management systems didn't track fuel usage by customer or plant item.
Legal Principles
Determining single vs. multiple supplies for VAT purposes.
Value Added Tax Act 1994 (VATA), Schedule 7A, and case law (Middle Temple, Talacre, France, Stadion Amsterdam).
Principles derived from CJEU cases on single vs. multiple supplies.
The Honourable Society of Middle Temple v HMRC [2013] STC 250 (TCC)
Taxing elements of a single supply at different rates.
Talacre Beach Caravan Sales Ltd v HMRC C-251/05 and European Commission v France C-94/09, Stadion Amsterdam CV v Staatssecretaris van Financiën Case C-463/16
Outcomes
Appeal allowed.
The supply of plant and fuel constituted multiple supplies. The fuel supply occurred when the customer chose not to refill the tank, representing an independent, optional extra.
GAP's alternative argument dismissed.
Even if a single supply, case law (Stadion Amsterdam) indicates that different VAT rates cannot be applied to individual elements of a single supply.
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