In Cheema Constructions Services Ltd & Anor v HMRC [2025] TC09418, the First Tier Tribunal (FTT) found that the Kittel Principle did not apply, meaning the company was entitled to reclaim input VAT.
VAT Cases & News
Summaries of interesting VAT cases for the SME owner.
In Sonder Europe Ltd v HMRC [2025] UT 00014, the Upper Tribunal (UT) found that the supply of holiday apartments to travellers was not eligible for the Tour Operators’ Margin Scheme (TOMS).
In Global By Nature Ltd v HMRC [2025] TC09396, the First Tier Tribunal (FTT) found that powdered vegan food supplements were zero-rated for VAT.
In Yorkshire Agricultural Society v HMRC [2025] UKUT 00004, the Upper Tribunal found that admission fees to the ‘Great Yorkshire Show’ were an exempt supply for VAT purposes.
HMRC have published 'Revenue and Customs Brief 3 (2024): VAT on cladding remediation work' which clarifies HMRC's policy on the recovery of VAT incurred on cladding remediation works which are carried out on existing residential buildings.
In Colchester Institute Corporation (CIC) v HMRC [2024] UT397, the Upper Tribunal (UT) found that government funding provided to a college constitutes an economic activity for VAT purposes. In this unusual case, HMRC agreed that their appeal should be dismissed but reserved the right to appeal to the Court of Appeal, maintaining that the decision in CIC v HMRC [2020] UKUT 0368 was incorrect. 
HM Treasury has published a response to its technical consultation on VAT and private school fees, that ran until 15 September 2024. Several technical amendments to the draft legislation will be made, with several new exemptions from the policy being introduced.
