Southport Flower Show Ltd v HMRC

In Southport Flower Show Ltd v HMRC (TC01938 – 19 April) a registered charity which organised a flower show reclaimed input tax. HMRC rejected the claim on the basis that the flower show was an exempt supply within VATA 1994 Sch 9 Group 12 Item 1. The charity appealed contending that it should be permitted to reclaim input tax because it had opted to tax the relevant land. The First-tier Tribunal dismissed the charity’s appeal. Judge Cannan observed that ‘the option to tax does not exclude exemption by virtue of Group 12’ and that ‘the Group 12 exemption is generally to the advantage of charities.’

Why it matters: Input tax is not recoverable where it is directly attributable to exempt supplies. The charity contended that it should be permitted to reclaim the relevant input tax because it had opted...