Tapi Carpets Limited v The Commissioners for HMRC

Facts

Tapi Carpets Limited is a flooring retailer operating 220 stores in the United Kingdom, selling carpets, vinyl, laminate and engineered wood, largely to domestic customers. Where a customer bought flooring, the customer could either arrange fitting himself or purchase from Tapi a "fitting arrangement service" for a fee, under which Tapi arranged for a fitter drawn from a vetted pool of independent fitters to attend the customer's home, the customer paying the fitter the fitting fee directly on the day. Customers taking that service were also required to purchase a delivery and care package, which carried a ten-year fitting guarantee. Tapi accounted for VAT on the arrangement fee and on the package, but not on the fitting fees, treating itself as the customer's disclosed agent and the fitter as principal in supplying the fitting service; many fitters were not registered for VAT. Following a compliance check begun in late 2022 and a store visit in Gateshead, HMRC assessed Tapi to VAT of £13,555,315 under the Value Added Tax Act 1994 for the quarterly periods from 06/19 to 12/23, on the footing that the fitters sub-contracted to Tapi and Tapi made an onward supply of fitting to its customers. Tapi appealed to the First-tier Tribunal.