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Mr and Mrs Kelly (trading as Ludbrook Manor Partnership) v CRC, Upper Tribunal (Tax and Chancery Chamber), 10 August 2017
Input tax on building refurbishment
Mr and Mrs Kelly in partnership as KFM provided financial advice. This was an exempt supply and KFM was not registered for VAT.
In February 2002 the couple bought Ludbrook Manor a substantial house with an annex formerly used as stables. They lived in the house while Happy Holidays Ltd (HHL) of which Mr and Mrs Kelly were the only directors and shareholders carried on the business of letting parts of the former stables to holidaymakers. These were standard-rated supplies.
In September 2010 the couple decided that the house should also be let to holidaymakers and HHL embarked on a programme of refurbishment. In March 2013 a new partnership LMP was formed to run the letting of the house. HHL invoiced LMP for the work and LMP claimed the input tax on the invoice....
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