Import VAT Recovery Denied: Tribunal Confirms Ownership Requirement for Input Tax Claims

• TSI Instruments Limited’s appeal against HMRC’s £8.5 million VAT assessment was dismissed by the First-tier Tribunal.
• TSI imported goods it did not own, paid import VAT, and claimed it as input tax, which HMRC challenged.
• The Tribunal ruled that input VAT recovery requires ownership of the goods and integration of import costs into taxable outputs.
• TSI was not entitled to reclaim the VAT because it was not the owner and the goods’ value was not reflected in its taxable services.
• The case underscores the need for importers to understand VAT rules regarding ownership and supply chain arrangements.

Source: saffery.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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