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In HMRC v Royal Opera House Covent Garden Foundation [2020] UKUT 0132 (TCC), the Upper Tribunal (UT) rejected a claim for the input VAT attribution of opera production costs to the taxable supply of catering and ice-cream to visitors. There were two separate supplies and the supply of opera was not a direct cost component of the supply of catering.

On appeal, the UT, which had the benefit of the judgment in the recent Supreme Court case of HMRC v Frank A Smart & Son Limited [2019] UKSC 39 which was released after the FTT’s decision in this case, found that:

As the link between production and catering was indirect, none of the input VAT incurred on production costs could be attributed to the catering supplies.

Links

VAT & Partial exemption
Making exempt and taxable supplies? How do you calculate the amount of input tax you can recover under the VAT partial exemption rules? What are the de minimis rules? A useful review of the rules and current case law.

FTT case write up: Royal Opera House Covent Garden Foundation v HMRC [2019] TC7157 

External links

HMRC v Royal Opera House Covent Garden Foundation [2020] UKUT 0132 (TCC)