VAT Cases

Summaries of interesting VAT cases for the SME owner.

Schedule 18 FA 2019 extends VAT Grouping to individuals and partnerships (including Scottish partnerships) that control the other bodies in a VAT Group, with effect from 1 November 2019.

In Lunar Missions Ltd v HMRC [2019] UKUT 0298 (TCC), crowdfunding with the offer of a reward to those who made pledges, triggered VAT registration: there was a supply for VAT purposes.

In Koolmove Limited v HMRC [2019] TC 7305, the First tier tribunal allowed a limited company to claim back input tax on legal fees personally incurred by the director to allow the company to be established.

In the Great Escape Game Limited v HMRC [2019] TC7375 the costs of the purchase and installation of themed escape rooms were found to be capital expenditure for the purposes of the VAT Flat Rate scheme.

 In Babylon Farm Ltd v HMRC [2019] TC7356  a company that produced hay and maintained outbuildings on its owners' land was not found to be running a business for VAT and a £19k input VAT claim was disallowed.

In Field Opportunities Ltd v HMRC [2019] TC 7326, the First Tier Tribunal (FTT) held that a trader should have realised that transactions were probably connected with fraud. As a result they disallowed a VAT input tax of more than £240,000.

In Westland Horticulture Ltd v HMRC [2019] TC7283 the First tier tribunal decided a product to repair lawns could not be zero-rated as animal feed and should be standard rated.