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	United Kingdom VAT & Duties Tribunals Decisions
You are here: BAILII >> Databases >> United Kingdom VAT & Duties Tribunals Decisions >> Rudge v Customs and Excise [2004] UKVAT V18758 (09 September 2004) URL: http://www.bailii.org/uk/cases/UKVAT/2004/V18758.html Cite as: [2004] UKVAT V18758

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18758

Input tax blocking for cars – Business only insurances

LONDON TRIBUNAL CENTRE

STEPHEN RUDGE Appellant

and –

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: PETER H LAWSON (Chairman)

SUNIL K DAS

Sitting in public in London on 7 September 2004

The Appellant did not appear and was not represented

Raymond Hill, Counsel, for the Respondents

© CROWN COPYRIGHT 2004


 


DECISION

The disputed decision of the Commissioners of Customs and Excise (hereinafter called "the Commissioners") is contained in a letter dated 29 January 2003.

The grounds upon which the assessment was made are as follows:-

1. Stephen Rudge trading as Waterhouse Financial Services (hereinafter called "the Appellant") carries on business as financial consultant from premises at 1, Blacksmith Cottages, Chiddingstone Hoath, Edenbridge, Kent TN8 7DJ.
2. The Appellant is registered for Value Added Tax with effect from 1^st August 2002 under registration number 797 1557 76.
3. Mr A Bensley officer of Customs and Excise visited the Appellant's premises on the 28^th January 2003 and inspected the Appellants records and accounts. From information obtained at the time of the visit and subsequently it appeared to the Commissioners that the returns for Value Added Tax made by the Appellant for the period ended 31^st October 2002 was incorrect in that input tax had been deducted in relation to the purchase of a motor car.
4. Under the provisions of section 73(1) of the Value Added Tax Act 1994 the Commissioners, using their best judgment, assessed the amount of Value Added Tax due from the Appellant in respect of the period 1^st August 2002 to 31^st October 2002 in the sum of £4,731 tax and duly notified the Appellant of the said assessment.
5. The Appellant contends that the car was purchased as a business accessory, that the car is not used for any other purpose than for business travel, the car has only business use insurance, mileage is recorded as appropriate. The Appellant also contends that since the Commissioners are stating that any car made available for private use would fail the availability test, then the test should also apply to commercial vehicles such as vans. Since policy is to allow the input VAT on vans, then the same should apply to cars.
6. The Commissioners contend that the Respondents have a blocking in force on recovery of input tax in respect of cars. The car is available for private use in that it is kept outside the Appellants home and could at some point be used for private purposes. If business only insurance is obtained for the purpose of indicating a business only intention yet private driving could take place using an alternative policy, then it is not enough in itself to show that no private use will be made of the vehicle. Certainly it does not indicate that the vehicle is not available for private use, which is the true test of paragraph 7(2G)(b) of The Input Tax Order 1992/3222, which indicates circumstances in which a car is not considered to be exclusively for the purpose of the business. For a car to be rendered unavailable for private use it would need to have a physical barrier preventing its use, and the Commissioners do not see how a sole proprietor could achieve this since only the sole proprietor could have control over the use of the vehicle. The Commissioners further contend that although there was a total block on input tax incurred on cars this was relaxes in limited areas. No equivalent block existed in connection with commercial vehicles and therefore different rules apply to them.
7. The hearing of the appeal was fixed for 7^th September 2004 in London but the Appellant did not appear. The Tribunal proceeded with the appeal under Rule 26(2) of the Tribunal Rules.
8. The appeal is dismissed. The Commissioners agreed to accept that the Appellant should pay the Commissioners' costs in relation to the hearing on 7 September 2004 only and we award them such costs accordingly.

PETER H LAWSON

CHAIRMAN

Release Date : 9 September 2004

LON/03/517