An important issue is whether the line of cases beginning with WT Ramsay Ltd v IR Commrs [1982] AC 300, and, including Furniss (HMIT) v Dawson [1984] BTC 71 apply to VAT.

Furniss v Dawson decided that, given two findings of fact, any step inserted in a series of transactions which has no purpose other than tax avoidance or the obtaining of a tax advantage is disregarded for fiscal purposes. The two crucial findings of fact are that:

(1)there should be a pre-ordained series of transactions which equate to a single composite transaction; and

(2)one or more of the steps have been inserted with no purpose other than tax avoidance or the gaining of a tax advantage.

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