Revenue

Value added tax - provision of seasonal pitches for caravans - chargeable to VAT

Colaingrove Ltd v Customs and Excise Comrs: ChD (Mr Justice Jacob): 16 April 2003

The appellants provided seasonal pitches for caravans.

The Commissioners of Customs and Excise maintained that the provision of these services was chargeable to VAT; the VAT and Duties Tribunal agreed.

The appellants appealed on the grounds that the UK legislation permitting the charge to VAT, namely schedule 9, group 1 of the Value Added Tax Act 1994, was incompatible with the European legislation it was intended to implement, namely article 13B of the Sixth Council Directive 77/388/EEC of 17 May 1977 on harmonisation of the laws of the member states relating to turnover taxes (Common system of value added tax: uniform basis of assessment (OJ 1977 L145, p1)) which provided that the leasing or letting of immovable property should be exempted from VAT but that member states had a general power to apply exclusions to the scope of that exemption.

Roderick Cordara QC and David Scorey (Eversheds) for the appellant; Rupert Anderson (Solicitor, Customs and Excise) for the commissioners.

Held, that the matter was acte clair and the UK legislation was clearly compatible with the European directive, since the permission to derogate from the exception from VAT contained in article 13B gave the member states a wide power to derogate either by way of a general rule or by way of specific exemption; that the UK's derogation in respect of seasonal pitches was a specifically targeted derogation which fell within the terms of the directive and the appellants' services were therefore chargeable to VAT.