Pre-registration input tax recovery: Aspire in the Community Services Ltd v HMRC [2024] UKFTT 176 (TC) (27 February 2024) is a complex procedural dispute about pre-registration VAT recovery. A business has no automatic right to recover input tax on supplies it received before it was registered for VAT but HMRC do have the discretion to allow claims. Here the problem was that the first use of the assets on which input tax was incurred was for exempt purposes but that later the assets were used for both exempt and taxable purposes. HMRC had agreed to use its discretion to allow recover of some of the input tax – by reference to the partial exemption method subsequently used by the business – but the taxpayer was seeking a higher rate of recovery. The dispute was over the way that HMRC’s decision could be challenged. The taxpayer argued that HMRC’s...
