Summaries of interesting VAT cases for the SME owner.
HMRC have published 'Revenue and Customs Brief 6 (2025): VAT deduction on insurance intermediary services supplied outside of the UK'. This explains a change in the right for input tax deduction for insurance intermediary services supplied outside the UK before 31 December 2023.
In 1st Alternative Medical Staffing Ltd v HMRC [2025] TC09678, the First Tier Tribunal (FTT) found that reimbursed employment costs that related to the supply of medical staff were not exempt from VAT.
In SM Developments North West Ltd v HMRC [2025] TC09665, the First Tier Tribunal (FTT) found that input VAT could not be recovered on a property development as the invoices for supplies received predated the effective date of registration.
In Illuminate Skin Clinics Ltd v HMRC [2025] UKUT 341, the Upper Tribunal (UT) found that the First Tier Tribunal (FTT) had made an error of law when considering the medical exemption for VAT. The FTT had failed to give sufficient consideration to the documents which evidenced a diagnosis by the clinic's doctor of any health disorders.
In Ferrero UK Ltd v HMRC [2025] TC09654, the First Tier Tribunal (FTT) found that Nutella Biscuits were not chocolate-covered and were therefore zero-rated for VAT.
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 Five Star (Development) Homes Limited v HMRC [2025] TC09668, the First Tier Tribunal (FTT) found that a trainee’s failure to submit VAT returns on time before neglecting to alert the managing director did not give rise to a reasonable excuse. HMRC’s late filing penalties were valid.
