V3.128 Identity of recipient

The recipient of a supply is the person who is entitled to recover the VAT charged as input tax1.The CJEU has held that 'the right to deduct provided for in the Sixth Directive [now Directive 2006/112/EC] does not apply to tax which is due solely because it is mentioned on the invoice'2. In Smart Organiser3, HMRC disallowed a claim for input tax on the grounds that the supplies in question (construction services made by subcontractors) had been made direct to the appellant by the subcontractors, rather than through intermediate companies. The intermediate companies had been formed by the foremen working on the construction projects to reduce the number of invoices which the appellant received. HMRC argued that the intermediate companies could not legally make the supplies in question under the Construction Industry Scheme (CIS). The tribunal held that the fact that the intermediate companies might have not been in compliance with the CIS rules did not mean that they could not have made the supplies in question. Nevertheless, the tribunal ruled that there was little evidence to suggest that in substance supplies of staff were made by any of the intermediate companies. The input tax claim was disallowed. It is not clear whether the appellant accounted for output tax on its onward supply to its clients; if it did, it equally unclear why the routing of the invoices created a problem.

In Redrow4, it was held that the recipient of a supply will normally be the person

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