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No white Christmas for skiing company

12 December 2019
Issue: 4725 / Categories: Tax cases

Snow Factor Ltd and Snow Factor Training Ltd (TC7439)


HMRC raised assessments for more than £420 000 covering the period September 2014 to November 2016 on the basis that Snow Factor Training Ltd (SFTL) was not an eligible body making exempt supplies of education. It claimed it offered tuition services in mountaineering skills. The department argued that it was in effect controlled by Snow Factor Ltd (SFL) - a commercial company - and the intention was to hive off tuition services to SFTL which would then be exempt from VAT. The income would be paid to SFL.

HMRC justified the assessment on the basis of three arguments:

  • SFTL was not an ‘eligible body’. Even if it rather than SFL supplied the training the services did not qualify for VAT exemption and were therefore standard rated.
  • The arrangement between SFTL and SFL was an artificial arrangement and an ‘abuse of rights’. It was therefore correct to redefine who was...

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