Readers’ forum: Can input tax be claimed on costs paid for relocation?

One of my clients opened a new branch of his business in Manchester and his trusted office manager agreed to relocate from London to Manchester to oversee this exciting new project. In return my client paid all of the employee’s removal costs so he was not out of pocket.

HMRC has queried some of the input tax claimed on the costs paid by my client but accepted others. For example the officer has accepted a claim on all legal fees and estate agent fees relevant to the manager selling and buying his old and new homes but disallowed input tax on the costs of a landscape gardener who carried out much-needed work on the front and back gardens of the new house. The officer has also disallowed 50% of the input tax on the cost of carpets at the new house because there is private and business...