Tax claims

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In a recent VAT case a taxpayer had reclaimed input tax on purchases that were 200 times the value of its taxable supplies.  Whilst there is no mathematical limit on such claims, and indeed costs often do exceed income in some periods, this case was beyond justification.  The basis of HMRC, and the tribunal, disallowing the input tax claim was that the business was not carried on a commercial basis.   Do approach any tax situation with an element of realism.

As with all of our tax tips and web pages this information is necessarily summarised and of a general nature.  If you would like detailed specific advice please contact us.