The Commissioners for HMRC v Gray & Farrar International LLP
[2023] EWCA Civ 121
UK Funerals On-line Limited v The Commissioners for HMRC
20 September 2023
[2023] UKFTT 784 (TC)
First-tier Tribunal
A company that moves bodies internationally argued its service should have zero VAT, not be exempt. A judge agreed because the main part of their service is transport, not funeral arrangements, so they won.
Key Facts
- •UK Funerals On-Line Limited (UKFO) provides repatriation services for deceased persons.
- •Services mainly involve transporting bodies from the UK to other countries.
- •UKFO arranges transport, embalming (meeting international regulations), documentation, and liaises with airlines and consignees.
- •HMRC initially deemed the services exempt from VAT under Schedule 9, Group 8, Item 2 of VATA 1994.
- •UKFO appealed, arguing the services are zero-rated under Schedule 8, Group 8 of VATA 1994.
- •The embalming is specific to international transport and differs from standard funeral embalming.
- •Coffins/caskets are chosen by customers, ranging from basic to elaborate.
- •The zinc-lined containers are removable and not suitable for burial or cremation.
Legal Principles
A supply of goods or services is exempt if it's described in Schedule 9 of VATA 1994.
VATA 1994, Section 31
Schedule 9, Group 8, includes exemptions for 'The disposal of the remains of the dead' and 'The making of arrangements for or in connection with the disposal of the remains of the dead'.
VATA 1994, Schedule 9, Group 8
Schedule 8 of VATA 1994 provides for zero-rating of certain supplies.
VATA 1994, Section 30(2)
Schedule 8, Group 8, includes zero-rating for transport of goods internationally and making arrangements for such transport.
VATA 1994, Schedule 8, Group 8
If a supply qualifies for both exemption and zero-rating, the zero-rating prevails (VATA 1994, s.30(1)). The predominant element of the supply should be determined from the typical consumer's perspective (Mesto).
VATA 1994, Section 30(1); Mesto Zamberk (Case C-18/12)
'In connection with' in the context of disposal of remains includes services usually provided by undertakers (Network Insurance Brokers).
Network Insurance Brokers v HM Customs and Excise Commissioners [1998] STC 742
Outcomes
Appeal allowed.
The Tribunal found the predominant element of UKFO's service is the specialist transport of human remains, making it zero-rated under Schedule 8 of VATA 1994, rather than exempt under Schedule 9.