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VAT and non-business use post-Tijmens

Category Technical Articles
AuthorTechnical Department
Article by Paul Smith, indirect tax partner, PricewaterhouseCoopers LLP. This article appeared in the May 2006 issue of Tax Adviser. If a clue were needed about the importance of the Tijmens case, it was to be found in the fact that one of the parties requested that the case be heard by a Grand Chamber. The reason for such a request is clear - for the tax authorities to win, it would have required the Court to go back on the principles established in a line of cases starting with the decision in Lennartz.

The importance of the case lies in its confirmation of the choice available to a taxable person when he buys an asset for both business and non-business use. However, there are consequences for taxpayers in the UK that have not yet been explored in detail, although HMRC have issued some guidance.

May 2006 by Paul Smith

Technical Department
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