Littlewoods Case: VAT Input Tax Attribution on Photography Costs for Partially Exempt Businesses

• Littlewoods sought to recover input VAT on photography costs used for catalogues and its online store.
• HMRC denied full recovery, arguing the costs also supported exempt finance and insurance supplies, requiring apportionment.
• The Tribunal ruled in favor of Littlewoods, finding the photography costs were exclusively for taxable retail sales, not for exempt supplies.
• No restriction on input tax recovery was required as the link to exempt supplies was indirect or non-existent.
• The judge distinguished this case from previous cases, noting different circumstances and legal tests.

Source: marcusward.co

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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