The FTT found that the taxpayer used, enjoyed and benefitted from the rental of the premises and had a vested interest in the supply of those premises for which it was paying. Viewing the arrangements in their entirety, the taxpayer can rightly be regarded as receiving for VAT purposes a taxable supply of goods by virtue of the leases for which it made payment, and the goods so supplied were used for the purposes of the business carried on by the firm. Therefore, the VAT charged on the rent was input tax of the firm and recoverable. The taxpayer’s appeal was allowed.
Source KPMG
