- Visual Investments International Ltd claimed input tax of over £54,000 for legal fees incurred on a commercial dispute
- HMRC believed Visual was not entitled to claim the input tax as the legal services were not directly linked to taxable supplies
- The dispute related to the transfer of shares in two companies to a joint venture vehicle
- The First-tier Tribunal ruled that Visual was not entitled to recover input tax on the legal fees
- Visual argued that the litigation was to protect business interests, but the FTT found the costs were to force the transfer of shares for profit
- The FTT also considered whether Visual was the sole recipient of the legal services
- Visual’s appeal was dismissed due to the FTT’s decision on the first point
Source: taxscape.deloitte.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
