Supreme Court confirms no VAT recovery on supplies mistakenly treated as exempt (Zipvit v HMRC)

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Article summary

Tax analysis: In Zipvit v HMRC, the Supreme Court had previously made a reference to the Court of Justice as to whether a trader could recover VAT on supplies made to it where the trader, the supplier and HMRC had all mistakenly treated those supplies as exempt for VAT purposes. The Court of Justice’s judgment was delivered in January 2022, ruling that the conditions for VAT recovery were not met because the VAT in question had not been ‘due or paid’. In light of this, the Supreme Court has dismissed the trader’s appeal.