Input VAT on Product Photography Fully Recoverable for Partially Exempt Retailers, FTT Rules in Littlewoods

• The FTT allowed Littlewoods Ltd’s appeal, ruling that input VAT on product photography for online/catalogue sales is fully recoverable.
• The photography costs were found to be directly linked to taxable retail sales, not to exempt finance or insurance activities.
• HMRC’s argument that the costs were residual and only partially recoverable was rejected.
• The FTT concluded there was no direct and immediate link between the photography costs and exempt credit/insurance supplies.
• The use of photographs was deemed exclusively for taxable retail supplies, with any link to exempt activities being at most indirect or non-existent.

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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