The issue before the tribunal was whether the VAT incurred by Skipton Building Society’s estate agent subsidiaries on the cost of advertising in the local press was wholly attributable to the sales of the properties advertised. The VAT would in that case be fully recoverable.
However HMRC argued that the cost was partly attributable to exempt services such as mortgage provision so should be treated as residual input tax for the purposes of the special method.
The taxpayer accepted that there was a link between the advertisements and the mortgage services but that it was not a direct or immediate one such as had been said to be essential in BLP Group plc v CCE (Case C4/94) [1995] STC 424. A general commercial link was insufficient.
HMRC argued that while the main purpose of the advertisements was to sell properties...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.