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Norseman Gold plc (TC3698)
The taxpayer was a holding company established in the UK. Its subsidiaries carried on gold mining in Australia where they were established.
The taxpayer registered for VAT in October 2007 but with effect from October 2006 with the trade classification of management consultancy.
The company subsequently submitted claims for input tax on UK expenses but HMRC disallowed them on the basis the business made no supplies of management services to the subsidiaries and was therefore not undertaking an economic activity. The firm appealed.
The First-tier Tribunal said the main difficulty for the taxpayer was the absence of an agreement about what services it could provide to the subsidiaries in return for payment. A “rather vague intention to levy an unspecified charge at some undefined time in the future” was not sufficient.
The judge said there was no “common understanding of what was payable when and in...
