Majid and Miah Properties v The Commissioners for HMRC
Decision date: 7 September 2022
Neutral citation: [2022] UKFTT 327 (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
This appeal concerned VAT assessments raised by HMRC against Majid & Miah Properties in respect of output tax on a lease to Mehfil (Preston) Ltd and multiple input tax disallowances. The Tribunal found the one‑year rent‑free period effective, no rent was paid and the lease terminated when Mehfil ceased trading, so most output VAT assessments were disallowed except for output tax of £2,166 for 02/17. The Tribunal allowed recovery of several specific input VAT items on the basis of alternative evidence but upheld numerous disallowances where invoices were in another name or pro forma; amended assessments were directed accordingly.
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: high
Where a lease provides an effective rent‑free period and no payments were made, regulation 90 tax points do not arise for those rent‑free periods so no output VAT is due for those periods. Further, input VAT can be recoverable where the claimant provides credible alternative evidence that supplies or services were for its business even if invoices are in another name, but invoices addressed to the tenant, unrelated third parties or pro forma invoices may justify disallowance.
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 Tribunal noted that the absence of cross‑examination on factual points supported acceptance of the appellant’s unchallenged evidence, and that aspirational documents (such as grant applications or projected turnover statements) do not alone establish that rental obligations were paid or affordable.