In Eurocent (Buckingham) Ltd v HMRC [2025] TC09666, the First Tier Tribunal (FTT) partially granted an appeal against HMRC's denial of input VAT recovery on fees associated with buying retail units.
In August 2022, Eurocent (Buckingham) Ltd (EBL) entered into a transaction to purchase a parade of let retail units from an unconnected party.
- EBL registered for VAT in October 2022 on the basis that it was purchasing the property as a Transfer Of Going Concern (TOGC).
- EBL submitted a late VAT return for the quarter ended January 2023, claiming an Input VAT repayment of £53,076 in respect of fees related to the purchase.
- HMRC Opened a check into the return, it being a VAT reclaim by a newly registered trader.
- HMRC issued a decision letter denying the recovery of £50,960 of the input VAT, in respect of two invoices:
- BHNV Developments Ltd for £230,000 plus £46,000 VAT.
- Colridge Ltd for £24,800 plus £4,960 VAT.
- After an internal review, HMRC upheld their decision.
- EBL appealed to the First Tier Tribunal (FTT).
HMRC claimed that despite requesting further evidence to support the validation of the invoices, they were unable to determine exactly when, where, or by whom the services were supplied, and whether the services were indeed supplied to the taxable person making the reclaim of input tax.
HMRC also believed that neither invoice met the requirements of VAT Regulation 14(1).
The FTT:
- Rejected HMRC's wish to run a wider argument than the validity of the invoices.
- HMRC's position was that in this appeal, they were entitled to argue that input tax recovery should be denied, even if the invoices met Regulation 14(1).
- Accepted that HMRC had conducted a wide-ranging check into the structuring of the purchase and associated supplies, invoices and flows of monies, but stated it was clear that HMRC's internal review considered only the matter of the validity of the two invoices.
In relation to the BHNV Developments Ltd invoice, the FTT found that:
- There was no requirement to show a separate date for the time of supply and date of invoice when they were both the same.
- The description of the services supplied was sufficient.
- While HMRC may require further information to satisfy themselves that a supply of services has taken place, that was not the statutory test.
In relation to the Colridge Ltd invoice:
- The invoice did not meet the requirements of Regulation 14(1) in that it did not include the address of the customer and did not contain a sufficient description of the services provided.
The appeal was partially granted in respect of the BHNV Developments Ltd invoice.
Useful guides on this topic
Input VAT: What constitutes a valid claim (& VAT invoice)?
What is Input VAT? Who can claim it? What is needed for a valid claim? What needs to be included on a VAT invoice and can you make a claim without one?
Partial exemption & input VAT
How do you calculate the amount of input tax you can recover under the VAT partial exemption rules? What are the de minimis rules?
Input VAT claims: Pre-registration
When can pre-registration input VAT be recovered? What are the time limits and restrictions?
Transfer Of Going Concern (TOGC)
Buying a business and VAT, do you take over the old owners' VAT registration? What is a Transfer Of a Going Concern (TOGC)? What conditions must be met? What are the consequences of a TOGC?
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