The Court of Appeal decision in the Hotel La Tour VAT case is controversial, raising questions about the treatment of recovery of input tax on share transactions but surely it will be appealed, says Sarah Kay CTA, lead technical writer at Croner-i
There was great excitement in the VAT world last month when the Court of Appeal found in HMRC’s favour in the long running Hotel La Tour (HLT) case which concerns the recovery of input tax incurred on professional fees connected to a share sale (R & C Commrs v Hotel La Tour Ltd [2024] BVC 15).
The Court of Appeal has thus overturned HLT’s decisive wins at the First Tier Tribunal (FTT) ([2022] TC 08335) and Upper Tribunal ([2023] BVC 508).
In this article, I explain the significance of the Court of Appeal’s decision for businesses. The case is important because unless HLT successfully appeals to the Supreme Court, a significant shift in the rules regarding the recovery of input tax on the costs associated with share transactions will have taken place.
