TC09672 - [2025] UKFTT 01262 (TC)

HMRC applied for £4,254.01of the input tax claimed to be struck out on the basis that it related to expenditure on zero rated purchases and therefore there was not input tax to recover. The supplies and the input tax reclaims made were as follows:

Mr Joseph argued that in each case there was an argument that the supplies should be standard rated and that the nature of the supply and the legal arguments over their VAT status needed to be considered in a full hearing. Mr Joseph did not offer any further analysis or illustrate why this was the case.

Mr Khan suggested the VAT treatment was clear, with no reason to suggest that the supplies would be standard rated.

Mr Joseph did not suggest the Thames Water bill was anything except the normal utility bill for domestic water and I cannot see how Schedule 8, Group 2 would not apply and Mr Joseph did not offer a reason. Similarly for the TfL costs, which I take to be for underground, buses and so on in London, no reason has been provided by Mr Joseph as to why schedule 8, Group 8 Item 4 for public transport does not apply and I cannot envisage one.

HMRC have mischaracterised the VAT treatment of the rent as being zero rated when it would be exempt under Schedule 9 but that is a distinction without a difference in the current circumstances. The Appellant’s business is run from Mr Joseph’s home which he rents. The Appellant has not presented an argument as to how the rent could be standard rated, for example the space occupied by the Appellant was not a dwelling or that the restrictions on opting to tax in paragraph 5 of Schedule 10 VATA did not apply and the landlord had in fact opted to tax. I cannot see a credible argument that would result in the rent being standard rated.

I therefore agree with HMRC that there is no realistic prospect of the Appellant succeeding in arguing that these supplies were standard rated.