Entertaining corporate meetings

The taxpayer (MSL) paid Glebe Corporate LLP for the use of meeting facilities at Glebe House. The meetings were part of consultancy services MSL provided to clients of MBL. Input tax was claimed by MSL on the invoices from Glebe on the basis that the meeting costs for food drink and overnight accommodation were passed on to MBL as part of the fees for its consultancy work. 

 

HMRC disagreed and disallowed the input tax claim on the basis that it related to business entertainment. The taxpayer appealed.

 

The First-tier Tribunal said MSL had provided a composite supply of services that consisted of a principal supply of consultancy and an ancillary one of corporate meeting services. The latter were not free – they were provided by MSL to MBL which paid for them by settling MSL’s...