The taxpayer was a registered charity which listed its main activities as ‘educational consulting’ and ‘collaboration projects’ when it voluntarily registered for VAT in 2018 with the registration date backdated to 21 February 2014. The first return covered the registration date until 30 June 2018 producing a repayment for £341 487 which was challenged by HMRC. The reason for the repayment was because of input tax claimed on the acquisition and refurbishment of its property in London.
Artists used the building – they gained studio space to paint the use of equipment and introductions to clients as well as advice from industry experts. The trading structure was complicated by a wholly owned subsidiary of the charity called SIL which was not registered for VAT.
The artists were charged for services by SIL with direct debits set up so that money could be paid...
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