DESIGN AND BUILD RECHARGES

摘要

The Community Housing Association Limited tribunal decision has been appealed successfully to the High Court. This related to a design and build structure carried out by a housing association, where the housing association initially incurred standard-rated professional costs, but set up a subsidiary design and build company and then recharged those costs to it. It sought recovery of VAT, which HM Revenue & Customs denied on the basis that the cost had actually been incurred by the housing association, not for onward charge to the subsidiary company, and therefore that this constituted exempt input tax. The tribunal had accepted that analysis, thereby appearing to create an immutable rule that once an organisation had incurred input tax for a given purpose, it could not change that purpose simply by making a recharge to a related company.