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Was the appellant entitled to claim input tax on the basis that it intended to make taxable supplies?

By Andrew Needham, December 2022

Summary 

HMRC issued assessments for input VAT claimed by the appellant on the basis that during those periods, the appellant did not carry on a business or economic activity, nor was there any direct and immediate link between the inputs and outputs during those periods. The appellant’s position was that throughout those periods it was carrying on economic activity and that there was the necessary direct and immediate link. 

Background 

In their written and oral submissions at the hearing, HMRC cited Article 9 of the Principal VAT Directive and the Court of Appeal decision in Wakefield College v HMRC [2018] EWCA Civ 952 as authority for the proposition that supplies must be made  to obtain income therefrom on a continuing basis in order for there to be an economic activity, and the Tribunal should consider whether a supply for consideration had been made ("a supply for consideration is

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