HMRC Wrongly Rejected Hotel Supplier’s VAT Claims, Court Says

The UK tax authority unreasonably refused evidence provided by a hotel room supplier to support its input tax deduction claims, a UK court ruled Tuesday.

His Majesty’s Revenue and Customs granted two of Hotelbeds UK’s input tax deduction claims on supplies of hotel rooms, so its denial of another two claims worth £10.2 million ($13.8 million) using similar evidence is improper, the UK High Court said in granting judicial review.

Taxpayers are generally required to hold invoices containing information, allowing the tax authority to verify supplier, transaction value, and other key details.

HMRC’s guidance, however, allows the tax authority to ...