Language of document :

Reference for a preliminary ruling from First-tier Tribunal (Tax Chamber) (United Kingdom) made on 25 July 2011 - Field Fisher Waterhouse LLP v Commissioners for Her Majesty's Revenue and Customs

(Case C-392/11)

Language of the case: English

Referring court

First-tier Tribunal (Tax Chamber)

Parties to the main proceedings

Applicant: Field Fisher Waterhouse LLP

Defendant: Commissioners for Her Majesty's Revenue and Customs

Questions referred

The principal question in the present case is whether the services provided by landlords under a lease agreement with their tenants ("the Services") should be regarded as an element of a single exempt supply of a lease of land, either because the Services form objectively a single indivisible economic supply together with the lease or because they are "ancillary" to the lease, which forms the principal supply (''the Principal Supply"). In determining this question and in the light of the ECJ's decision in Case C-572/07 Tellmer, how relevant is it that the Services could be (but are not in fact) supplied by persons other than the landlords, albeit under the terms of the present leases in question the tenants had no choice but to receive the services from the landlords?

In determining whether there is a single supply, is it relevant that a failure by the tenant to pay the service charge would entitle the landlord not only to refuse to provide the Services but also to terminate the lease agreement with the tenant?

If the answer to question 1 is that the possibility of third parties providing the Services direct to the tenant is relevant, is it merely a contributory factor in determining whether the Services are either a single, indivisible economic supply, which it would be artificial to split or an ancillary supply to the Principal Supply, or is it a determining factor? If it is merely a contributory factor or if it is not relevant at all, what other factors are relevant in determining whether the Services are an ancillary supply? In particular how relevant is it whether the Services are performed in or in respect of the demised premises which are the subject matter of the letting or in other parts of the building?

If the possibility of third parties providing the Services is relevant, is more particularly what is relevant whether the Services could as a legal matter be supplied by third parties, even if this would be difficult in practice to organise or agree with the landlord, or is the practical possibility or the common practice in the provision of such services the relevant consideration?

The Services in the present case represent a range of services provided in return for a single service charge. In the event that some of these services (e.g, cleaning of common parts, the provision of security services) are not part of a single indivisible economic supply or are to be regarded as ancillary to the Principal Supply, but other services are, would it be correct to apportion the total consideration between the various services in order to determine the portion of the consideration chargeable to tax and that portion not so chargeable? Alternatively would it be correct to regard the range of services provided as so closely linked to each other that they form "a single indivisible economic supply which it would be artificial to split" being of itself a single supply separate from the leasing of property?