A Birmingham venue has lost an appeal for a VAT refund in a complex tax dispute involving changes to capping provisions on tax refunds.
In the upper tier tribunal case of Birmingham Hippodrome Theatre Trust v HMRC UKUT 057 (TCC) the nightclub’s theatre services were treated as taxable by HMRC. However, it was later established that these services should have been exempt.
Birmingham Hippodrome had previously charged output VAT and therefore claimed this back from HMRC. However, the Hippodrome had also previously claimed input VAT related to its (then) taxable supplies, to which it should not have been entitled since its supplies were exempt.