In C Newell v HMRC [2021] UKFTT 199 (TC) (1 June 2021) the FTT upheld a taxpayer’s appeal against HMRC’s decision to restrict his VAT recovery due to the receipt of outside the scope income in the form of payments under the renewable heat incentive scheme for Northern Ireland.
Mr Newell operated a biomass business which involved generating hot air from burning wood chips which in turn was used to dry wood chips and other materials (belonging to him and others). He then either sold the materials retained them for burning himself or charged third parties for drying their materials. He also received periodical support payments (PSPs) under the renewable heat incentive scheme for Northern Ireland.
From a VAT perspective it was common ground the income that the business generated was all either taxable (sales made by the biomass business) or outside the scope (the income from...
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