In Zipvit v HMRC [2018] EWCA Civ 1515 (29 June 2018) the Court of Appeal found that that Zipvit which had received supplies of services that had been treated as exempt by the supplier but had subsequently been found to be taxable was not entitled to an input tax credit in respect of those supplies.
Zipvit supplied vitamins and minerals by mail order. It used the services of Royal Mail to send its mail orders and to distribute advertisements. Both Royal Mail and HMRC believed that the supplies made by Royal Mail were exempt and no VAT invoices were issued for these supplies. In April 2009 the CJEU ruled in R (oao TNT Post UK Limited) v HMRC (Case C-357/07) that the postal exemption did not apply to individually negotiated supplies; so it became clear...
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