Fundamental requirements of an invoice for input tax claim

The taxpayer was the representative member of the Cantor Fitzgerald Group VAT group. Another group member (C) traded in carbon credit transactions. Between May and June 2009 C purchased carbon credits from another company (S) but it later transpired that S was a fraudulent trader was not VAT registered and did not account for output tax on the transactions.

HMRC refused the taxpayer’s claim for input tax on the basis that the invoices were not valid.

The First-tier Tribunal dismissed the taxpayer’s appeal so the matter progressed to the Upper Tribunal.

The taxpayer said the lower tribunal had erred as a matter of EU law by agreeing that the invoices were invalid. Further HMRC’s decision to refuse to exercise the discretion to allow the input tax claimed on S’s invoices was unreasonable.

After considering the case law on the right to deduct the Upper Tribunal said it...