No credit for input VAT on legal fees (HMRC v Praesto Consulting UK Limited)

Table of contents

• Original news
• What are the practical implications of this case?
• What was this case about?
• Facts
• FTT decision
• Grounds of appeal
• What did the UT decide?
• Ground One
• Ground Two
• Case details

Article summary

Tax analysis: The Upper Tribunal (UT) has overruled the first-tier Tax Tribunal (FTT) and held that there was no direct and immediate link between the supplies of legal services in relation to proceedings against the sole director of a company and the taxable activity of the company. The services were not used for the purposes of the company’s business and as such no credit for input VAT on the legal fees was allowed.