Independent VAT Consultant
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istock_Nicola Colombo

Closing the door on VAT avoidance


HMRC was right to disallow input tax of £80,096 claimed by a company that imported doors but then gave the goods away for free to connected companies.

10th Jun 2021
Independent VAT Consultant
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Importing doors

HMRC raised an assessment for £80,096 in February 2019 to disallow input tax claimed on the purchase of doors by a company called The Door Specialist Ltd (TDS) (case TC8132). But surely that cannot be correct – why can’t a door company claim input tax on buying doors?

HMRC’s argument was that none of the doors were used for any ‘economic activity’ or ‘business’ of the taxpayer. In other words, there was no link between the import VAT paid on the doors when they arrived in the UK from China and any future taxable sales. 

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Replies (2)

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By Paul Crowley
10th Jun 2021 15:52

This sounds like the recent thread about employees thinking that they should get VAT free items if employer can claim back the VAT

This is a bit more than just a misunderstanding. It was deliberate and concealed. Even the bookkeeper should know better.

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Replying to Paul Crowley:
By johnjenkins
11th Jun 2021 09:53

Methinks not "avoidance" but "evasion" although difficult to prove in court.

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