“The first is that anything done for a consideration which is not a supply of goods constitutes a supply of services. This makes it unnecessary to define the services in question. The second is that unless the services are rendered for a consideration they cannot constitute the subject matter of a supply. In fact, of course, there can be no question of deducting input tax unless the taxpayer has incurred a liability to pay it as part of the consideration payable by him for a supply of goods or services. In my opinion, these two factors compel the conclusion that one should start with the taxpayer's claim to deduct tax. He must identify the payment of which the tax to be deducted formed part; if the goods or services are to be paid for by someone else he has no claim to deduction. Once the taxpayer has identified the payment the question to be asked is: did he obtain anything – anything at all – used or to be used for the purposes of his business in return for that payment? This will normally consist of the supply of goods or services to the taxpayer. But it may equally well consist of the right to have goods delivered or services rendered to a third party. The grant of such a right is itself a supply of services.”
“The tribunal agrees with Mr Vallat that the important question is whether the company obtained “anything – anything at all” for the payments. We find that it did: it obtained the right for the various construction services to be performed at, and certain goods delivered to the directors’ house. In applying the Redrow judgment the exercise of this right is clearly a supply of services to the Appellant. The fact that the directors benefited from this does not change the analysis. The Respondents’ contention that a supply of a particular nature should first be identified and then the question asked as to who received it cannot in our view be accepted in the light of Redrow .”