University of Huddersfield Higher Education Corporation v HMRC

In University of Huddersfield Higher Education Corporation v HMRC (No. 2) (TC02823 – 15 August) a university which was partly exempt implemented a scheme with the objective of recovering the whole of the input tax incurred in refurbishing a derelict mill (which it opted to tax). The scheme involved the creation of a discretionary trust the grant of a 20-year lease of the mill to the trust and a leaseback by the trust to the university. The creation of the trust and the grants of the lease and underlease all took place on the same day. Customs issued an assessment on the basis that the lease and leaseback were not effective for VAT purposes (so that most of the input tax should be attributed to the university’s exempt supplies). The university appealed. The VAT Tribunal referred the case...