In Tower Bridge GP Ltd v HMRC [2021] UT30, a company did not have valid invoices to deduct input tax. There was evidence of fraud in the supply chain and HMRC declined to exercise its statutory discretion to allow alternative evidence.

  • Tower Bridge was refused the right to recover input tax incurred on certain purchases of emissions allowances under the European Emissions Trading Scheme on the basis that VAT purchase invoices were invalid as they did not show the supplier’s VAT numbers and the customer address and name.
  • The VAT regulations give power to HMRC to use discretion and to allow alternative forms of evidence where there are no requirements for strict compliance with the invoicing regulations.
  • HMRC refused to exercise its discretion in favour of Tower Bridge.
  • HMRC said that the supplier was charging UK VAT and yet was not registered for VAT and, therefore, was fraudulent.
  • Tower Bridge doubted if whether HMRC had exercised reasonable discretion, in time, and within the statutory framework. It applied for disclosure of documents and information from HMRC which was refused.
  • The company then Appealed to the FTT.

The FTT upheld HMRC’s decision to deny Tower Bridge’s claim to deduct input tax on the basis that Tower Bridge did not hold valid VAT invoices for the input tax claimed in relation to those transactions and HMRC had lawfully exercised its discretion against allowing Tower Bridge to deduct the input tax.

The company appealed to the UT: contending that:

  • HMRC’s decision not to exercise its discretion to accept alternative evidence and allow deduction of the input tax was unreasonable.
  • It held valid invoices as they met the substantive conditions of the VAT requirements.

 The UT disagreed and dismissed the appeal, it found that:

  • Input tax can only be reclaimed if: the requirements of the law are met which include providing a VAT number and the name and address of the customer, or,  if HMRC exercised its statutory discretion to allow alternative evidence which was not given in this case.


In this case, one can only agree with HMRC's decision to refuse the input tax claim. This case highlights the importance of obtaining detailed invoices from suppliers in order to claim input VAT at the right time.

Useful guides on this topic

What constitutes a valid VAT invoice?
What needs to be included on a VAT invoice? Can you claim back VAT without an invoice? What evidence do you need to claim input VAT? 

How to appeal an HMRC decision?
Disagree with a HMRC decision? How to appeal, what type of decision can you appeal, what are your different options when you disagree with HMRC? What are the key steps in making an appeal?

External links

Tower Bridge GP Ltd v HMRC [2021] UT30

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