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HMRC internal manual

VAT Business/Non-Business Manual

HM Revenue & Customs
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Legal history: cases about taxable persons with more than one activity


Please note that the following material is not a full summary of the case - it merely highlights the principle referred to in the appropriate section of this manual.

Rainheath Ltd VTD 1249

Rainheath Ltd was registered for VAT in respect of its pig-farming business. The company bought a boat. It claimed the boat was to be used for chartering to the public.

The chartering was found to be a non-business activity because of the small number of lettings, the limited nature of the advertising for the lets, and the company’s selectivity in accepting hirers.

Please also refer to the material on Enkler at VBNB74600.

Leeds Kashrut Commission and Beth Din Committee VTD 465

The Kashrut Commission administered the dietary laws. The Beth Din Committee administered the Jewish religious laws.

The Kashrut was found to be business because it involved making supplies for a consideration and was similar to the activities of persons who sought to profit from them.

The Beth Din activity was also found to be business but in its own right rather than part of the Kashrut’s business activities. The reasons for this were that it had the attributes of a commercial activity since it involved the receipt of fees and was similar to activities carried on by others for reward.

Walker (DA) VTD 240

Mr Walker was registered for VAT as an accountant. He had wanted to avoid being partly exempt by treating his letting activities as non-business.

He also owned three houses which he let out to tenants. The tribunal took the view that the letting activity had to be considered separately from the accountancy business. However, the degree of control and management of the houses exercised by Mr Walker was sufficient for it to be regarded as more than just an investment and was therefore a business activity for VAT purposes.

Williamson (RW &AAW) VTD 555

RW and AWW Williamson was a partnership that was registered for VAT in respect of a retailing activity. The partners also rented out garages. They claimed this was an investment rather than a business activity.

The tribunal found that the renting out of the garages was more than an investment and was a business for VAT purposes. This was because of the degree of involvement by the partners in the leasing and because it was conducted on sound and recognised business principles. It also had as its purpose the provision of services for a consideration.

The tribunal found that the registration of the partnership under a trading name did not preclude any other business activities undertaken by the partnership from falling within the VAT registration.