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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Customs & Excise v First Choice Holidays Plc [2001] EWCA Civ 308 (7 March 2001) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2001/308.html Cite as: [2001] EWCA Civ 308 |
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION
REVENUE LIST (Mr. Justice Neuberger)
Strand, London, WC2A 2LL Wednesday 7th March 2001 |
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B e f o r e :
LORD JUSTICE RIX
and
SIR RONALD WATERHOUSE
____________________
The Commissioners of Customs and Excise |
Appellants |
|
- and - |
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First Choice Holidays plc |
Respondent |
____________________
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
VAT
& Duties Tribunal Division, Customs & Excise for the Appellants)
Mr Kevin Prosser QC (instructed by Messrs Klegal, London, EC4A 2AB for the Respondent)
____________________
VERSION
OF JUDGMENT
Crown Copyright ©
LORD JUSTICE RIX:
"All transactions performed by the travel agent in respect of a journey shall be treated as a single service supplied by the travel agent to the traveller. It shall be taxable in the Member State in which the travel agent has established his business or has a fixed establishment from which the travel agent has provided the services. The taxable amount and the price exclusive of tax, within the meaning of Article 22(3)(b), in respect of this service shall be the travel agent's margin, that is to say, the difference between the total amount to be paid by the traveller, exclusive ofvalue
added tax, and the actual cost to the travel agent of supplies and services provided by other taxable persons where these transactions are for the direct benefit of the traveller."
"Subject to articles 8 and 9 of this Order, thevalue
of a designated travel service shall be determined by reference to the difference between sums paid or payable to and sums paid or payable by the tour operator in respect of that service, calculated in such manner as the Commissioners of Customs and Excise shall specify."
"The total selling price of your supplies under the scheme is your total charge to your customers."
"In a case where the brochure price of a holiday is £1000 and the travel agent gives the customer a discount of £50, the agent will tell the customer that he is able to reduce the price from £1000 to £950. The travel agents will not say to the customer that they are making a contribution of £50 towards the holiday or that they are paying £50 on the customer's behalf,"
This enabled First Choice to submit that the contract between First Choice and customer was for a holiday at £950, not £1000: First Choice could not sue the customer for £1000, only for £950; and the £50 which the travel agent had to pay to First Choice was purely a matter of arrangement between them and had no part to play as between customer and travel agent or as between customer and First Choice.
"it is intended to tax only the final consumer. Consequently the taxable amount serving as a basis for theVAT
to be collected by the tax authorities cannot exceed the consideration actually paid by the final consumer which is the basis for calculating the
VAT
ultimately borne by him" (Elida Gibbs
Ltd
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v.
Customs and Excise Commissioners (Case C-317/94) [1996] STC 1387 at 1402, para 19).
"if the facts have been found and the Community law issue is critical to the court's final decision, the appropriate course is ordinarily to refer the issue to the Court of Justice unless the national court can with complete confidence resolve the issue itself."
SIR RONALD WATERHOUSE:
LORD JUSTICE MUMMERY: