Passion Incorporated Limited v The Commissioners for HMRC

Passion Incorporated Limited v The Commissioners for HMRC

The appellant failed to provide sufficient evidence to demonstrate that the challenged expenditure was incurred for the purpose of its business or was directly linked to taxable supplies. HMRC’s disallowance of input tax and the best judgment assessment were reasonable and in accordance with the law. The appeal is dismissed.

Parties
Appellant: Passion Incorporated Limited; Respondents: The Commissioners for His Majesty’s Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
11 October 2024
Procedural Posture
Tax Appeal / First Tier Tribunal Judgment
Outcome
Appeal dismissed
Legal Topics
Value Added Tax, Input Tax Disallowance, Best Judgment Assessment, Business Expenditure, Burden of Proof
Tax Law Value Added Tax Input Tax Disallowance Best Judgment Assessment Business Expenditure Burden of Proof

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Parties

Passion Incorporated Limited

Appellant

The Commissioners for His Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / First Tier Tribunal Judgment

Legal Issues

  1. 1 Whether input tax disallowance under s 25(3) VATA 1994 was correct
  2. 2 Whether best judgment assessment under s 73(1) VATA 1994 was valid
  3. 3 Whether the appellant provided sufficient evidence to link expenditure to taxable supplies

Ratio Decidendi

The appellant failed to provide sufficient evidence to demonstrate that the challenged expenditure was incurred for the purpose of its business or was directly linked to taxable supplies. HMRC’s disallowance of input tax and the best judgment assessment were reasonable and in accordance with the law. The appeal is dismissed.

Court Disposition

Appeal dismissed