TC09676 - [2025] UKFTT 01278 (TC)

The appellant, TSI Instruments Ltd (“TSI”), imports goods into the UK for repair and servicing. Between 2019-2023 it paid import VAT on the import of these goods and claimed credit for the import VAT as input tax in its VAT returns.

HMRC however say that TSI is not entitled to an input tax credit for the import VAT as it is not the owner of the goods. They have issued VAT assessments or adjustments for the VAT periods from 10/19-4/23. Following HMRC's acceptance that its original calculations needed to be amended, the amount of VAT at stake is just under £8.5 million.

TSI appeals against these assessments and adjustments on the basis that there is no requirement in the relevant legislation that the importer should be the owner of the goods in order for any import VAT to be available as an input tax credit. Instead, it says that, as long as the goods are imported for the purposes of its taxable business and it bears the costs of the import, the import VAT can be credited as input tax.

I should mention, as the parties are aware, that a very similar issue came before the Tribunal in Piramal Healthcare UK Limited v HMRC [2023] UKFTT 891(TC) in 2023. I was a member of the Tribunal which heard that appeal and which decided the point in question in favour of HMRC. However, significant additional points were deployed by Mr Sykes on behalf of TSI which I have considered carefully and with an open mind.

It will be noted that the period which is relevant to this appeal spans the UK's departure from the EU on 31 January 2020 and the end of the implementation period on 31 December 2020. It is however common ground that, for the purposes of this appeal, there is no difference in the treatment of transactions which took place before or after those dates.

TSI has confirmed that it does not challenge the validity of any of the assessments/adjustments. Based on the documentary evidence, I am satisfied that the relevant requirements have been complied with. The only issue for the Tribunal to determine is therefore whether, in the circumstances, the import VAT paid by TSI is available as an input tax credit.