United Kingdom: FTT dismisses VAT appeal on free carpets in new-build homes

• The FTT dismissed Abbey Group Ltd’s appeal against HMRC’s assessment to recover input VAT wrongly reclaimed on free carpets supplied with new-build dwellings.
• The parties agreed the VAT law blocks recovery of input VAT on such carpets for residential property developers, even where the dwellings themselves are zero-rated.
• Abbey argued HMRC had created a legitimate expectation through a 2016 discussion that the input VAT was recoverable.
• The FTT held it had no jurisdiction to decide the legitimate expectation argument in a VAT assessment appeal, applying the exclusivity principle.
• Even so, the FTT indicated that, if it had jurisdiction, it likely would have found HMRC gave a clear and unambiguous statement on which Abbey relied.

Source: claritaxnews.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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