TC09666 - [2025] UKFTT 01253 (TC)

We reject HMRC’s wider argument and specifically that in purely exercising its discretion under Regulation 29(2) (as opposed to wider powers) HMRC were entitled to reject a VAT registered trader’s claim for input tax even if the invoice satisfied the conditions in Regulation 14(1).

We find for the reasons set out above that the BHNV Invoice satisfied the conditions in Regulation 14(1) and the Appellant is entitled to claim the associated VAT as input tax.

However, we find that the Colridge Invoice did not satisfy the conditions in Regulation 14(1) and HMRC were not unreasonable in declining to exercise their discretion under Regulation 29(2). The Appellant is therefore not entitled to claim the associated VAT as input tax.

For completeness, HMRC accepted in the hearing that the Appellant is not liable for the £4,891.12 of assessed output tax, and so we allow the Appellant’s appeal on that issue.

Accordingly, the Appellant’s appeal is allowed in part.

This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice.