Source: All England Reporter
Publisher Citation: [2006] All ER (D) 195 (Apr)
Neutral Citation: [2006] EWHC 824 (Ch)
Court: Chancery Division

Lightman J

Representation Amanda Tipples (instructed by the Solicitor for Revenue and Customs) for the commissioners.
  Andrew Hitchmough (instructed by Penningtons LLP) for the taxpayer.
Judgment Dates: 12 April 2006


Value added tax - Supply of goods or services - Supply - Gas and electricity - Taxpayer and third party entering into netting agreement for supply of gas and electricity - Netting agreement leading to set-off between parties - Commissioners making VAT assessment on basis that date of payment for supplies falling within relevant accounting period - Whether commissioners using correct payment date - Whether assessment valid.

The Case

Where the amount of consideration payable under a transaction was affected by a set-off arrangement, there were usually two separate supplies involved by way of barter and it was therefore necessary to identify those mutual supplies so that VAT was charged and accounted for in each direction. Applying those principles to the netting agreement entered into by the taxpayer, the court dismissed the commissioners' appeal on the basis that having considered the relevant set-offs, the assessment had been based on the wrong date and was therefore invalid.

Practice Areas

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