This appeal related to the recoverability of input tax arising from fees for professional services incurred in respect of the sale of shares by the appellant in its subsidiary, Hotel La Tour Birmingham Ltd (HLTB). HMRC disallowed the appellant’s input tax claim for the period 09/17 and issued a corresponding assessment on the basis that the sale of shares was an exempt supply. The appellant appealed on the basis that the relevant services were directly and immediately linked to its downstream taxable activities, that the effect of it and HLTB being in a VAT group was that the supply of the HLTB shares was to be treated as outside the scope of VAT, and, in the alternative, that the sale of the shares in HLTB was to be treated as a sale of a going concern. 

In mid-2015, the appellant decided to construct and develop a new hotel in Milton Keynes (the Milton Keynes Development). It was anticipated that this would cost approximately £34,500,000.