From the perspective of an observer not close to the case, two features are difficult to understand in the recent ITC decision (Investment Trust Companies (ITCs) (In Liquidation) v HMRC [2012] EWHC 458 (Ch)).
The scenario this case addresses seems almost a law school exam question. A supplier provides a customer with services which should have been exempt from VAT but which the legislation makes subject to VAT of £100. To do so it buys in professional services from an adviser which attract VAT of £25. The supplier charges the customer and recovers VAT of £100. It deducts the £25 input VAT which it paid to the adviser and accounts to HMRC for the balance of...
