C Jenkin & Son Ltd v Revenue & Customs

Supply on leasing agreements of residential caravans � separate pitch agreements between occupiers and site owners � whether supply zero rated or exempt � VATA� 1994 Sch 8 Grp 9, item 1 & Sch 9 Grp 1, item 1 � use of ESC to disadvantage of taxpayer � whether unreasonable conduct � appeal allowed

This is an appeal against assessments for the VAT quarters 12/09 to 04/13 to recover overclaimed input tax.� The input tax had been reclaimed by the taxpayer on the basis that the supplies in question were zero rated, whereas the Revenue considered that they were exempt.� The assessments now under appeal were confirmed on review on 21 February 2014.� The sum at issue is �481,068.

I had written and oral evidence from Ms Angela Seymour, the assessing officer, Mr Robin Skilton, the taxpayer�s Finance Manager, and from Mr Michael Finn; it was supplemented by the usual bundle of documentary evidence.� There is essentially no dispute about the facts themselves, and I find the following position established at least on the balance of probabilities. �

The taxpayer supplies caravans, used as mobile homes, to members of what is known as the �travelling community� eligible for housing benefit for use as their homes and to be sited on pitches provided, in general, by local authorities.� (It is common ground that the caravans are within the definition of a �caravan� for the purposes of zero rating � see below.) The caravans are the subject of leasing agreements made between the traveller and the taxpayer, and there are separate pitch agreements made between the traveller who has leased a caravan and the owner of the site on which it is placed.

The leasing agreement for the caravan made between the taxpayer and the traveller is couched in the terms of a tenancy of real property, although no interest in land is created.� It is headed �Long Term Leasing Agreement� and has the following features: