- The Tax Tribunal ruled that import VAT cannot be deducted as input tax if the importer is not the owner of the goods and the value of the goods is not reflected in the service price.
- TSI Instruments Ltd imported customer-owned goods for repair, paid import VAT, and tried to reclaim it, but HMRC denied the deduction.
- The Tribunal upheld HMRC’s position, stating that ownership or price reflection is required for input VAT deduction under both EU and UK law.
- Businesses providing repair or servicing of customer-owned goods should review their VAT practices and consider alternatives like having the owner act as importer or using inward processing relief.
Source: addleshawgoddard.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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