Different Kettle Ltd - Tribunal Decision

There has been some comment already on the Different Kettle Tax Tribunal decision (www.bailii.org/uk/cases/UKFTT/TC/2011/TC01387.html). The taxpayer company is a specialist Direct Marketing Agency, working with charities, including some well-known names. Their website is worth checking out (www.differentkettle.com).

HMRC declined a claim for £2,566 input tax, which related to the purchasing of mailing lists, which related to the onward supply of direct mail packs to charities for fundraising purposes. Apparently there was some concern as to the liability of these supplies. The Tribunal decision reads; "HMRC accepted that its reason for refusing the VAT credit for input tax had no basis in law." Astonishingly the original decision was upheld on review.

It is hard to see how the original Officer could have come to this decision, much less how another Officer could uphold the decision. Quite understandably the taxpayer company brought in Counsel for the Hearing. I am pleased that the Tribunal awarded costs against HMRC.

How many more decisions by HMRC are not challenged by small and medium sized businesses!?