Four years after Wakefield College, in which the Court of Appeal set out the correct approach for determining whether an activity is a business activity for VAT purposes, HMRC updates its internal manual: the VAT Business/Non-Business Manual specifically. The former ‘business test’, derived from the 40-year-old Lord Fisher case, has finally been updated. HMRC now refers to a new set of factors to take into account when considering whether an activity is business for VAT purposes. It also discusses how non-business activities impact on VAT recovery, but its guidance oversimplifies the law almost to the point of misrepresenting it. In particular, its position on businesses that carry out the occasional non-business activity.
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Four years after Wakefield College, in which the Court of Appeal set out the correct approach for determining whether an activity is a business activity for VAT purposes, HMRC updates its internal manual: the VAT Business/Non-Business Manual specifically. The former ‘business test’, derived from the 40-year-old Lord Fisher case, has finally been updated. HMRC now refers to a new set of factors to take into account when considering whether an activity is business for VAT purposes. It also discusses how non-business activities impact on VAT recovery, but its guidance oversimplifies the law almost to the point of misrepresenting it. In particular, its position on businesses that carry out the occasional non-business activity.
If you or your firm subscribes to Taxjournal.com, please click the login box below:
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