VAT abuse following Hilden Park

Hilden Park implemented arrangements seeking to transfer sporting facilities to a non-profit making entity, whilst retaining the value/profit from such activities in what became a land owning partnership. The arrangements were ineffective and the purported non-profit making body was determined to owe VAT on its supplies. Nevertheless, the Upper Tribunal’s judgment appears to conclude that the partnership could be assessed under the abuse principle. Whilst the decision might appear to widen the scope of the abuse test, in reality it represents a practical solution to enable VAT recovery despite the insolvency of the companies. The Hilden Park approach to abuse is likely to apply only to a series of transactions effected by more than one party; or where the arrangements are comprised in a series of discrete steps which are capable of being severed from one another.