FREE OF CHARGE SUPPLY IN SVEDA DEEMED AS INPUT TAX

摘要

The court of Justice of the European Union's (CJEU) decision in Sveda UAB (C-126/14) has been accepted as being a significant if evolutionary development in legal interpretation of input tax recovery. Perhaps its most significant contribution to the UK debate on input tax is to confirm, yet again, that HMRC's idea that there is a need for costs to be reflected in the price of outputs is a dead letter. The case concerned a commercial company which owned a shop to which access was afforded by a path. The path was significantly upgraded to turn it into an attraction in itself, which people might choose to visit and use irrespective of whether they would buy anything in the shop. The company obtained a substantial government grant towards development of the attraction. There was no intention to charge users for access to the path. The company hoped that the attraction would draw more people to the shop.