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Fanfield Ltd v HMRC (and related appeal)

In Fanfield Ltd v HMRC (and related appeal) (TC00919 – 1 February) a company (F) which provided specialist electronic analysis services was registered for VAT and operated the flat-rate scheme. HMRC issued an assessment charging tax on the basis that bank interest which it had received formed part of its ‘relevant turnover’ for the purpose of computing its liability under the scheme. F appealed contending that the interest was ‘incidental non-business investment income’ which should not be included as ‘relevant turnover’. The tribunal accepted this contention and allowed the appeal. Sir Stephen Oliver held that ‘the supply made when a person places money with another for a period of time in return for interest is a prime example of the type of supply that is depending on the circumstances capable of falling on either side of the line. That 'activity' will at one...

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