3D CROWD CIC v THE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMS
Decision date: 12 June 2023
Neutral citation: [2023] UKFTT 495 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
3D Crowd CIC, a community interest company that rapidly produced and donated 3D-printed face shields in early 2020, sought recovery of VAT it had incurred on accreditation, production and overhead costs. HMRC denied recovery on the basis the supplies were donated; the tribunal found 3D was an intending trader and allowed recovery of VAT on BSI/CE accreditation costs in full, while VAT on production and overheads was only recoverable to the extent attributable to business (requiring apportionment). The appeal was therefore allowed in part, with parties directed to agree or have the tribunal determine an apportionment.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: medium
An intending trader can recover input VAT on preparatory costs directly and immediately incurred to enable future taxable supplies (such as accreditation), even if no taxable supplies were ultimately made; where expenditure serves both business and non-business (donation) purposes it must be apportioned, and the subjective intention of those controlling the entity when the expenditure was incurred is material to whether the costs were for business purposes.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The judgment suggests that large-scale donations meeting substantial recipient needs are unlikely to be treated as mere samples or business gifts for input tax purposes, and notes that external factors (such as government procurement channels) may affect commercial opportunities but do not by themselves defeat an input tax claim absent fraud or abuse.