Les Howard highlights a tribunal case concerning a holding company and input tax.
There have been a number of Tax Tribunal and Higher Court cases over the years involving holding companies. HMRC often try to argue that, since a holding company’s activities are essentially passive investment, they are not ‘making taxable supplies’ nor are involved in ‘economic activities,’ thus denying input tax recovery. This was precisely the argument HMRC brought in the FTT case of Bluejay Mining PLC. HMRC denied over £800,000 of input tax over a period of seven-and-a-half years.
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