Boiler man

The taxpayer was a representative member of a VAT group of which a boiler manufacturer was also a member. The taxpayer delegated the operation of a reward scheme to another company. Under the scheme installers of the taxpayer's boilers received points which they could redeem for goods and services from the company's catalogue. The company invoiced the taxpayer at the full recommended retail price for the items and charged VAT on the amount. The taxpayer did not claim the input tax in its returns.

However in May 2003 the taxpayer's accountants made a voluntary disclosure claiming the input tax.

HMRC rejected the claim but said that they would allow the deduction of the part of the overall sums paid to the company which represented the associated marketing services. The VAT tribunal dismissed the appeal. The High Court allowed the taxpayer's subsequent appeal in which...