The taxpayers offered a baggage storage facility for airline passengers on the landside areas of airport terminal buildings. They had accounted for VAT at the standard rate but claimed a rebate on the basis that the service fell within VATA 1994 Sch 8 group 8 items 6 and 11(a) and should therefore be zero rated.
HMRC refused the claim so the taxpayers appealed. The VAT tribunal held that 76% of the taxpayers' supplies should be zero rated. HMRC's appeal against that decision was dismissed but the taxpayers cross-appeal allowed with the result that 95% of the supplies were held to be zero rated.
The issue before the Court of Appeal was whether items 6 and 11(a) should be construed consistently with article 15(9) and (13) of the Sixth Directive and whether the provision of luggage storage facilities fell within the exemption in that article.
The...
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