In TL Step by Step v HMRC [2015] UKFTT 134 (23 March 2015), the FTT dismissed an appeal against HMRC’s decision to compulsorily deregister the taxpayer.
This was an appeal against HMRC’s decision to compulsorily deregister the taxpayer on the basis that insufficient evidence had been produced of an intention to set up a business or to make taxable supplies.
TL had applied to register online, describing its business as ‘wholesale beer, spirits, wines and liqueurs, and business consultancy services’. The registered address was a residential property.
The FTT noted that the only two sales made by the taxpayer over a period of eight months were to persons known to its managing director and were for very small amounts. The FTT also accepted that the managing director had attended wine fairs but observed that ‘nothing had happened’ as a result. There also seemed to have been no follow up with potential purchasers and there had been no due diligence.
Finally, the appellant was not able to provide a business plan or projections, and there was also no evidence as to a funding model or any market research.
The FTT concluded that the evidence showed that the appellant’s aspirations had not yet ‘crystallised into anything that remotely resembled a business’.
Why it matters: Clearly, the taxpayer had had the vague intention of running a business. However, in the absence of concrete steps, this was not enough to justify VAT registration.
In TL Step by Step v HMRC [2015] UKFTT 134 (23 March 2015), the FTT dismissed an appeal against HMRC’s decision to compulsorily deregister the taxpayer.
This was an appeal against HMRC’s decision to compulsorily deregister the taxpayer on the basis that insufficient evidence had been produced of an intention to set up a business or to make taxable supplies.
TL had applied to register online, describing its business as ‘wholesale beer, spirits, wines and liqueurs, and business consultancy services’. The registered address was a residential property.
The FTT noted that the only two sales made by the taxpayer over a period of eight months were to persons known to its managing director and were for very small amounts. The FTT also accepted that the managing director had attended wine fairs but observed that ‘nothing had happened’ as a result. There also seemed to have been no follow up with potential purchasers and there had been no due diligence.
Finally, the appellant was not able to provide a business plan or projections, and there was also no evidence as to a funding model or any market research.
The FTT concluded that the evidence showed that the appellant’s aspirations had not yet ‘crystallised into anything that remotely resembled a business’.
Why it matters: Clearly, the taxpayer had had the vague intention of running a business. However, in the absence of concrete steps, this was not enough to justify VAT registration.
