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What’s that for?
Key points
- There are some surprising and amusing facts in cases of VAT reclaims.
- In Lai’s Limited the owner of a company bought a powerboat to gain catering contracts.
- The company claimed over £30 000 in input tax claiming the powerboat had a business purpose.
- Its appeal at the FTT failed as did its claim for input tax.
- Flockton makes it clear that the question of purpose is subjective.
- Rosner clarifies that because some benefit to the business can be identified does not mean that the costs were incurred for the purposes of the business.
- The intention to fulfil a business purpose must be genuine and a clear nexus between the expenditure and the business’s activities must exist.
The past 50 years of VAT have provided us with some bright spots amid the encircling gloom not least in the voluminous case law related to input...
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