Sales of land and buildings are generally exempt from VAT. However, an owner of land and buildings can opt to tax their property so that it then includes VAT. Schedule 10 to the VAT Act 1994 provides for compulsory disapplication of an option to tax in certain circumstances. If the relevant provisions apply, a sale of property where an option to tax has been exercised goes back to being a sale that is VAT exempt.
In 2001, David Moulsdale, trading as Moulsdale Properties ("Moulsdale") purchased office property. Moulsdale exercised an option to tax over the property. In 2014, Moulsdale sold the property. When Moulsdale sold the property, VAT was not charged. Moulsdale argues he did not charge VAT because Schedule 10 to the VAT Act 1994 meant his option to tax was disapplied and so the sale of the building was VAT exempt. His Majesty's Revenue and Customs ("HMRC") disagreed. HMRC's position was that the option to tax was not disapplied under Schedule 10 to the VAT Act 1994. Accordingly, the sale was not tax exempt and Moulsdale should have accounted for VAT on the sale of the property which HMRC assessed to be £191,562 (plus interest of £11,491).

The Respondent VIP Communications was a company specialising in commercial multi–user gateways (“COMUGs”), a system which enables phone calls and text messages from landlines to be routed directly on to mobile networks.
                The Appellant is concerned that COMUGs give rise to national security and public safety concerns. This is because the COMUG system means that information identifying the caller is not conveyed to the network making identification almost impossible.
In 2017 Ofcom issued a direction stating its intention to make regulations exempting COMUGs from licensing requirements. In response the Secretary of State directed Ofcom that COMUGs should not be exempted.
                The Respondent brought Judicial Review proceedings arguing that the Secretary of State acted beyond their powers in giving the direction. The High Court and the Court of Appeal found that the Respondent was correct. The Secretary of State now appeals to the Supreme Court.