Jurisdiction(s):
United Kingdom

Visual Investments v HMRC: FTT refuses input VAT on legal services—recipient was subsidiary/owners; no direct and immediate link to appellant’s taxable supplies; Sofology applied

Published on: 01 October 2024

Published by a LexisNexis Tax expert

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Visual Investments International Ltd v HMRC [2024] UKFTT 843 (TC)

Legal advice was obtained to pursue enforcement of an alleged oral agreement concerning the transfer of shares in two broadcasting technology companies to a joint venture, Streaming Investments plc, which later entered creditors’ voluntary liquidation. Broadcasting Investment Group Ltd (BIG), a subsidiary of the appellant, rather than the appellant itself, held a significant shareholding in the joint venture. The First-tier Tribunal determined that BIG, and not the appellant, was the principal recipient of the majority of the legal services. As the appellant and BIG were not joined in a VAT group, the appellant had no right to recover VAT on services rendered to its subsidiary. Additionally, as set out below, the Tribunal concluded that the appellant’s owners—a father and son—were also recipients of the legal services...

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