VAT is chargeable on taxable supplies1 only where they are made in the course or furtherance of business2. The nature of business carried on or deemed to be carried on is described in Division V2.2.
HMRC policy3 regarding whether an activity is a business or non-business activity has developed over time. Please refer to V2.203 for commentary regarding HMRC policy and how it has developed.
Before 1 January 1978, the term 'in the course of a business' was used in the legislation and, in considering the meaning of this phrase, in Heart of Variety, the Tribunal chairman said4:
'It seems to us that we must do our best with the phrase in the context where we find it, and we see no reason to give it either a narrow construction or a wide one. On that basis we think that for a supply to be made in the course of a business, the making of it must be part and parcel of the carrying on of that
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