Input tax claim denied

The taxpayer a limited liability partnership registered for VAT in August 2013 stating its activity was to renovate and develop properties. As a result of a compliance visit in 2016 HMRC disallowed all input tax for the periods January 2014 to October 2015. It raised an assessment on the basis that the taxpayer had not made taxable supplies and had not provided the necessary evidence to support the VAT claimed as input tax. It was also shown by HMRC that 70 purchase invoices on which input tax had been claimed related to a project relevant to an associated business that was not VAT registered because it made exempt supplies.

The taxpayer said that HMRC had acted unreasonably in issuing the assessment and appealed.

The First-tier Tribunal said the burden of proof was on the taxpayer to show that input tax had been correctly claimed. In the...