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OXFAM v REVENUE & CUSTOMS COMMISSIONERS

An appellant charity failed to adduce sufficient evidence that it had entered into a contractual relationship with the Revenue and Customs Commissioners in relation to the repayment of residual VAT for expenditure on activities that were not related to either wholly business or wholly non-business activities, and on that basis the appellant was not entitled to deduct expenditure on professional fundraisers from the denominator of non-business expenditure when calculating input tax under the Value Added Tax Act 1994.

9 September 2008

The appellant charity (O) appealed against a decision of the respondent Revenue Commissioners refusing its claim for repayment of VAT. For the purposes of calculating VAT, O was deemed to have income from non-business activities and business income. To establish what input tax O could recover, O had to establish how much of the VAT incurred was input tax and then apportion it between business and non-business expenditure, including between expenditure that was neither wholly for business nor wholly for non-business activities. There were no rules setting down a standard method or governing agreement of a method for determining what VAT was input tax. O agreed with the commissioners on a method called “the approved method”, under which the apportionment percentage was reached by dividing O’s VAT-exclusive expenditure on its business activities by the total of its

VAT-exclusive expenditure on its business and non-business activities. O used that method for several years wi...

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