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Tower Resources PLC v HMRC

In Tower Resources PLC v HMRC [2021] UKUT 123 (TCC) (20 May 2021) the Upper Tribunal (UT) upheld the decision of the First-tier Tribunal (FTT) that management charges by an oil and mining holding company to its subsidiaries represented an economic activity for VAT purposes.

Tower had provided management services to local subsidiaries as well as technical services relating to geological and geophysical work. The local costs and the costs of provision of technical services by Tower were charged to subsidiaries through the addition of the relevant amounts to intercompany loan accounts.

The FTT had decided that Tower did make supplies for consideration (for the purposes of Directive 2006/112/EC art 2) and that those supplies were an economic activity (within the meaning of Directive 2006/112/EC art 9). Consequently Tower was able to recover a significant amount of input tax on costs.

HMRC appealed to the UT....

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