In Grimsby College Enterprises Ltd v HMRC (Upper Tribunal – 7 May) an institute of further education had incorporated a wholly-owned subsidiary company (L) to undertake commercial activities. In 2001 the institute decided to arrange for the construction of a new classroom block.
L reclaimed the input tax on the construction. HMRC issued assessments to recover the tax on the basis that the relevant supplies had been made to the institute (most of whose supplies were exempt) rather than to L. L appealed contending inter alia that there had been a novation of the relevant contracts.
The Tribunal reviewed the evidence in detail rejected this contention and dismissed the appeal. Judge Bishopp observed that 'the evidence supporting an effective novation critical to the company's case was almost non-existent'....
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In Grimsby College Enterprises Ltd v HMRC (Upper Tribunal – 7 May) an institute of further education had incorporated a wholly-owned subsidiary company (L) to undertake commercial activities. In 2001 the institute decided to arrange for the construction of a new classroom block.
L reclaimed the input tax on the construction. HMRC issued assessments to recover the tax on the basis that the relevant supplies had been made to the institute (most of whose supplies were exempt) rather than to L. L appealed contending inter alia that there had been a novation of the relevant contracts.
The Tribunal reviewed the evidence in detail rejected this contention and dismissed the appeal. Judge Bishopp observed that 'the evidence supporting an effective novation critical to the company's case was almost non-existent'....
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