- A Community Interest Company (CIC) produced over 200,000 face shields using 3D printers and donated them to the NHS during the COVID-19 pandemic.
- The CIC incurred VAT on its purchases, including costs for seeking CE certification and materials for producing the face shields. HMRC disallowed its input tax claim on the basis that the PPE was donated free of charge and the VAT had no link to taxable supplies.
- However, the CIC argued that it intended to make taxable supplies and was seeking to enter contracts to supply PPE in return for payment.
- The FTT found that the CIC was seeking to charge for PPE supplies on a basis that went beyond notional fees and was therefore in business.
Source KPMG
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