RDS Driving Services Ltd v Revenue and Customs (VAT - SUPPLY : Single or multiple)

VAT � single or multiple supply where single prepayment but customer unable to participate in all components � single supply � appeal dismissed

In HMRC�s Statement of Case and Skeleton Argument it appeared that this is an appeal against a ruling by the respondent (�HMRC�) in a letter dated 25 May 2016. The Notice of Appeal suggested that it was a decision dated 9 September 2016. In fact it was a decision dated 19 July 2016 which was confirmed on review on 9 September 2016. Furthermore that decision of 19 July 2016 stated that it should be read in conjunction with the earlier decision of 25 May 2016. I have done so.

For the avoidance of doubt, although the point did not arise in the hearing, I make it explicit that, notwithstanding the protestations of the appellant�s agent in the correspondence, I accept that it was entirely appropriate for HMRC to treat the original request for review as a request for reconsideration and then to issue a new decision on 19 July 2016. The appellant�s arguments until that point had not overtly raised the question of whether there were multiple supplies, or not.� Consequently, HMRC had not addressed that issue.

�The ruling which is challenged was to the effect that the appellant (�RED�) was making a single supply to its customers of a Driving Instructor Training Course (�the Course�) and VAT is due on the whole of the supply, even if the customer failed to complete any one or more of the three Parts of the Course.� RED argues that it is entitled to make a retrospective adjustment to output tax in the event that a customer fails to commence one or more Parts of the Course.

Regrettably, there was no Statement of Agreed Facts and nor was there any witness evidence. However, with consent, Mr Hetherington gave oral evidence since there was a paucity of detail as to how RED operated.� We had Skeleton Arguments from both parties, a Bundle of Legislation and Authorities, the details of which are annexed at Appendix A, and a slim Bundle of correspondence which included the �RED Instructor Training Course Agreement� (�the Agreement�).