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Court of Appeal’s decision in Hotel La Tour Ltd

10 June 2024 / Ciaran McGee
Issue: 4940 / Categories: Comment & Analysis , Hotel La Tour Ltd (TC8335) , TOGC , VAT
Hotel La Tour Ltd: Ghost Busting?

Key points

  • The Court of Appeal’s decision in Hotel La Tour Ltd has come as a surprise to many observers: the court found firmly for HMRC.
  • The BLP case had given tax practitioners clarity by finding that VAT on costs associated with an exempt share sale could not be reclaimed. Since the 2006 case of Kretztechnik AG the rules are less clear.
  • Will the case appear before the Supreme Court?

Back in October we reviewed the implications of the case of Hotel La Tour Ltd [2023] UKUT 00178 (TCC) (HLT) and observed that there was a spectre of increased input VAT recovery haunting the world of VAT. This spirit had been unleashed by the decisions of the First-tier Tribunal (FTT) and Upper Tribunal (UT) both of which found for the taxpayer.

However on 21 May the England and Wales Court of Appeal (CA) handed...

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