HMRC discretion on pre-registration VAT recovery for Aspire In The Community Services Ltd: FTT decision

• AICS is a state-regulated provider of residential care for individuals with autism, learning difficulties, and behavioral problems
• AICS had applied the welfare exemption to its services and never registered for VAT
• Following the conclusion of LIFE Services in 2021, private welfare providers could provide unregulated care services and charge VAT
• AICS restructured, started making taxable supplies, and recovered a proportion of VAT on its costs
• AICS wanted to recover £31,727 as pre-registration input tax
• HMRC allowed AICS to recover a proportion of the VAT
• FTT refused AICS’ application for disclosure of documents showing how HMRC exercised their discretion
• FTT found that HMRC’s discretion had been exercised in favor of AICS
• The question of how HMRC calculated AICS’ repayment was deemed irrelevant
• The application for disclosure was refused by FTT

Source: taxscape.deloitte.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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