I consider therefore that GLS has discharged the burden of proving that the £282,000 payments were by way of loan and not consideration for taxable supplies. As the provision of loan finance is an exempt supply for VAT, GLS was not obliged to include the £282,000 payments in its VAT returns. The VAT returns were not incomplete therefore. Accordingly the requirements of section 73(1) VATA were not satisfied. The assessments should be reduced by £47,000 accordingly.
Source: bailii.org
