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Jul

Is Deer Stalking a "business" Holmes? Elementary my dear Customs .... PUBLISHED IN VAT

Holmes reached for his famous hat, and rose languorously from his armchair.

 

"Watson, if a man has a deerstalker the time must come that he stalks some deer. Quick, we are off to Euston Station."
 
"Must we Holmes? It is such a business going to Scotland at such expense, to a remote moorland just to obtain a paltry helping of venison. The benefits are out all proportion to the cost."
 
"And that, my dear Watson, is why we are going, precisely because the costs are phenomenal. And where there are huge costs what benefit do we instantly reap? Heh?"
 
"Blowed if I know Holmes. Makes no sense to me."
 
"Watson; I do sometimes wonder whether you ought to have become a VAT inspector rather than taken the Hippocratic Oath. It is obvious. You receive loads of input tax, and, as sales of venison are in any case zero rated for VAT, then it's a case of take take take, unless you are Customs, in which case it is give give give."
 
"Have you lost your senses Holmes. You have to spend the money to start with, and spend all that bally time and effort."
 
"You are too prosaic Watson. Where is the romance of business? Dead in you it seems. Grab your shooting stick, we have to catch the 11.34 from Euston."
 
Some time later......
 
"Watson, we have purchased a helicopter, several winches, a huge refrigerator, and guns and ammunition sufficient to reconstitute the Western Front. All that input tax will be coming back the moment you submit the VAT return."
 
"Well, there's the thing, Holmes. You see, I have submitted it, but they refused the claim. They said deer stalking was just a gentleman's pastime. Not an "economic activity" apparently, so no VAT claim for us. Can't help thinking it was the claim on that fearful helicopter contraption that caused them to see red."
 
"I knew that already, Watson. I can always tell when you are hiding something from me and I knew that Customs would have blocked it by exactly yesterday if they were going to..."
 
"Heavens Holmes! How do you do it?"
 
"Enough Watson. This is our chance to land a glove on behalf of Scottish Estate owners everywhere. I will now take on the unlikely persona of a certain Mr de Ferranti, successful businessman and lover of deer stalking and selling venison, and I will challenge HMRC in the tribunal."
 
"Ha. As if anyone will believe that Ferranti name. MacDonald would be better..."
 
"Nonsense. Make the arrangements Watson. We are having our day in Court."
 
Still later... At the Tribunal
 
"I submit, Sir" said Holmes, "that my activity is indeed an economic activity despite being expensive to operate and likely to elicit meagre income because those two facts have no bearing on the VAT analysis whatsoever. It does not matter a jot that the enterprise may make a loss, either in the short, medium, or even long term. The only issues are as follows:
 
Is it a serious undertaking, earnestly pursued? (to which the tribunal answered 'Yes', because Holmes - sorry, Ferranti - had indeed pursued it earnestly).
 
Is it pursued with reasonable continuity? Yes
 
Is it run on recognised business principles/lines? Yes.
 
Is it the kind of activity others would carry on as a business? Selling venison - of course, yes.
 
Is it primarily concerned with making supplies? Yes, because the point is to sell venison.
 
Is it on a substantial enough scale? Well it is no smaller scale than many businesses involving a handful of people, so yes it is.
 
And so it was inevitable that the decision was that this was an economic activity, and thus a business, and thus input tax could be claimed.
 
"Watson. What do we learn from this episode?" asked Holmes.
 
"That the most expensive lessons are the best ones, Holmes?"
 
"Not really, Watson, though that is the best point you have made for several weeks. It is that one's first intestinal reaction, often based on that imposter - common sense - rarely delivers the correct answer to the 'fiscal theme park' called VAT. And that if one's mindset is too close to that of certain VAT inspectors then one too often reacts to red rags which are really red herrings. What was the red herring here, Watson?"
 
"Let me guess - the helicopter?"
 
"Indeed Watson. You are finally learning. Cold logical dissection is all that counts in such a case. An emotional response is a flawed response."
 
Ref; Mark Ziani de Ferranti – TC01288
 
 
 
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