- Taxpayer Win on Consideration Argument: The Colchester Institute Corporation successfully argued that grant funding for education constitutes consideration for the supply of education, allowing them to claim back overdeclared output tax, despite the acceptance of grant-funded education as a non-business activity.
- Impact of VNLTO Case: Following the European Court of Justice case VNLTO, the scope of the Lennartz mechanism was significantly narrowed, which affected the taxpayer’s ability to claim input tax on refurbishment works after 2008, as the works did not qualify under the revised interpretation.
- HMRC’s Limited Appeal: The Upper Tribunal (UT) noted that HMRC did not contest the consideration argument determined in the earlier UT ruling, leading to the dismissal of their appeal regarding output tax assessment on non-business use of buildings, as the First-tier Tribunal (FTT) ruled that no output tax was due.
Source KPMG
