- Littlewoods, an online retailer, claimed full VAT input tax recovery on product photography costs.
- HMRC denied the claim, arguing the costs promoted both taxable retail sales and exempt financial services, requiring apportionment.
- The First-tier Tribunal (FTT) upheld Littlewoods’ appeal, finding the costs were attributable only to taxable supplies.
- The FTT determined the photography promoted only retail goods, not financial services, and any link to exempt services was indirect or non-existent.
- The FTT criticized the legal test used in a similar case (N Brown) and favored a more specific, transactional approach.
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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