In a bizarre ruling the Court of Appeal has decided that cigarette machines can “occupy land” for the purposes of VAT.
Henry, Ward and Schiemann LJJ unanimously ruled that in pubs, hotels and other premises the machines are occupiers in the eyes of the law.
Ward LJ commented that reaching this decision was “not altogether easy”.
The case centred on whether an agreement to install a cigarette-vending machine in a public house constituted a licence to occupy land, and was therefore exempt from VAT.
In reaching the decision, the Court of Appeal overturned a VAT Tribunal ruling that the machines were not occupiers, and were therefore subject to VAT.
Explaining the decision, Ward LJ said: “The machine is not temporarily making use of the premises. Because the machine was taking up its space on the premises, it was occupying the land it stood on or was annexed to.”
Commissioners of Customs & Excise v Sinclair Collis Ltd CA (Henry, Ward and Schiemann LJJ) 24 June 1999
PLS News 24/06/99
