Business purpose or benefit?

The director of the appellant company was a surveyor who operated his business via limited companies including the appellant.

After a VAT inspection HMRC raised assessments for repayment of input tax which the officer believed had been incorrectly claimed. The company disputed the assessments.

The issues included:

• invoices not addressed to the appellant;
• maintenance of a burglar alarm system;
• car park charges;
• subsistence expenses; and
• business entertainment.

With regard to the invoices the Revenue said VAT had been claimed by the appellent on invoices addressed to other companies.

The director agreed it had been a mistake to reclaim the VAT in this instance saying it had been a book entry error. He said he had asked the taxman for help on correcting the error but...