Case: partial exemption attribution

The First Tier Tribunal (FTT) case of N Brown Group plc (TC07022) depicts a long-running dispute between HMRC and the taxpayer over the attribution of advertising costs connected with an online retail business.

This business offers credit terms for which it charges in a similar manner to a credit card (such that interest only arises on rolled over balances). The interest income is significant, and a considerable number of customers pay interest, though many do not (and these tend to be the less ‘loyal’ customers).