Supplies by a statutory body

The UK branch of the South African Tourist Board (SATB) a statutory body funded by the South African government was registered for VAT in the UK and incurred the tax on supplies it received.

It claimed a refund of input tax but HMRC said only 15% was attributable to taxable supplies. The rest was attributable to non-taxable supplies of marketing services to the South African government.

The First-tier Tribunal dismissed the SATB’s appeal.

The Upper Tribunal looked at whether the tourist board made taxable supplies for a consideration to the South African government or was a statutory body funded by a government grant.

The tribunal concluded that the arrangement between the SATB board and the South African government did not amount to a supply of services by the tourist board for a consideration. There was no relevant reciprocity and no direct link between the funding of the...