Heartlands House Limited v The Commissioners for HMRC
Decision date: 1 September 2023
Neutral citation: [2023] UKFTT 747 (TC)
Overall AI summary confidence: medium
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: medium
This appeal concerned Heartlands House Ltd’s claim to recover input VAT of £28,221.96 for period 09/19 which HMRC denied, principally because many costs were paid to a now-dissolved subcontractor (Caihma) and HMRC queried whether the purchases were made in connection with taxable supplies. The First-tier Tribunal found the company produced contracts, invoices, bank payments and credible witness evidence showing it intended to make and did make taxable supplies, rejected HMRC’s criticisms, and allowed the appeal.
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
Where a VAT-registered construction business can produce contemporaneous contracts/tenders, supplier invoices, bank payment evidence and subsequent client payments (even if reduced), that combination can establish an intention to make and entitlement to input tax; deficiencies in administrative or due diligence practices, standing alone and absent evidence of knowing involvement in fraud or that supplies were not intended, do not necessarily defeat an input tax claim.
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 suggested that absence of the appellant’s name from planning documents, delayed enforcement of contractual remedies, or failure to register under CIS are indicators of poor management but are not determinative of whether taxable supplies were intended or made; such factors do not automatically negate entitlement to input tax.