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The taxpayer supplied stretch limousines designed to carry up to ten persons, but which had been adapted by the removal of the seat next to the driver to allow only nine passengers.
The taxpayer said his cars satisfied VATA 1994, Sch 8 Group 8 item 4(a) (“in any vehicle, ship or aircraft designed or adapted to carry not less than [10] passengers”) in that they had been designed to carry ten or more.
HMRC disagreed; the First-tier Tribunal dismissed the taxpayer’s appeal.
The Upper Tribunal said the vehicles had been adapted to carry only nine people, and this was fatal to the claim his supplies of transport services were zero rated. It was irrelevant they had originally been designed for the transport of ten passengers.
The taxpayer’s appeal was dismissed.
