Macaw Properties Ltd v HMRC

In Macaw Properties Ltd v HMRC (TC01863 – 15 March) a company (M) was incorporated in 1999 and purchased a large estate which included an 18th-century mansion house. M registered for VAT in 2007 (backdated to October 2004) and opted to tax the estate. It reclaimed substantial amounts of input tax relating to work carried out on the estate. HMRC rejected the claim on the basis that the work did not relate to any business. M appealed contending that it had incurred the expenditure with the intention of using the mansion house as a hotel. The Tribunal reviewed the evidence in detail and allowed the appeal in part finding that in October 2004 M had had the intention of using a stable block as a hotel but that it had not had such an intention with regard to the main house until 1 January...