- GAP Group Limited v HMRC is a recent case that highlights the complexities of determining single or multiple supplies when multiple elements are being supplied.
- GAP Group Limited is a plant hire company that provides equipment and red diesel to the construction and civil engineering sectors.
- GAP treated the supply of equipment and red diesel as separate supplies and applied different VAT rates to each.
- HMRC disagreed and argued that there was a single supply of equipment and red diesel, resulting in under-declared output tax.
- GAP appealed to the First Tier Tax Tribunal and was successful in proving that the supplies were separate.
- The FTT referenced previous cases and principles to determine that the supplies were not closely linked enough to be considered a single transaction.
- The customer had a choice to refuel the equipment or not, and the supply of red diesel did not enhance the use of the equipment.
- The key principle in this context comes from the Levob Verzekeringen and OV Bank case.
Source: saffery.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
