HMRC has a decades-old problem accepting the use of dormant companies by partnerships to hold leases, and a poor track record in successfully challenging recovery of property-related VAT costs by the partnerships that use them. Ashtons Legal is the latest example. In that case, the FTT held that a partnership which used, enjoyed and benefited from a lease of premises, and which had a vested interest in the supply of those premises for which it was paying, could rightly be regarded as receiving their supply for VAT purposes. Despite successive defeats on this issue, HMRC may yet still continue to test its views in slightly different factual scenarios. Should it do so, HMRC’s arguments can be defeated by clarity of intention, proper implementation of what is intended, and documentary evidence of both.
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HMRC has a decades-old problem accepting the use of dormant companies by partnerships to hold leases, and a poor track record in successfully challenging recovery of property-related VAT costs by the partnerships that use them. Ashtons Legal is the latest example. In that case, the FTT held that a partnership which used, enjoyed and benefited from a lease of premises, and which had a vested interest in the supply of those premises for which it was paying, could rightly be regarded as receiving their supply for VAT purposes. Despite successive defeats on this issue, HMRC may yet still continue to test its views in slightly different factual scenarios. Should it do so, HMRC’s arguments can be defeated by clarity of intention, proper implementation of what is intended, and documentary evidence of both.
If you are not a subscriber, subscribe now to read this content.
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