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Two are not one

08 March 2012
Issue: 4345 / Categories: Tax cases , VAT
HR Patrick and JR Patrick (TC1699)

The taxpayers a husband and wife partnership owned a farm. The business included the provision of self-catering holiday accommodation as well as a haulage operation and cattle and sheep.

In addition the wife ran a bed and breakfast (B&B) business as a sole trader from the farmhouse. The turnover was less than the VAT registration threshold.

After a VAT visit HMRC declared that the farming partnership and the B&B should be treated as a single entity. The taxpayers appealed.

The Revenue cited a number of reasons for ruling the two businesses were one for VAT purposes:

  • the bank accounts for the partnership and the B&B were joint ones in the names of both taxpayers;
  • the same bookkeeper was employed for both businesses;
  • money was sometimes transferred from the B&B account to that of the...

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