Plat UK Limited v The Commissioners for HMRC [2026] UKFTT 999 (TC)

[2026] UKFTT 00999 (TC)Case No TC 09944
FIRST-TIER TRIBUNAL
TAX CHAMBER
Hearing Heard on: 16-17 June 2026Date Judgment date: 02 July 2026
Taylor House, London
Appeal reference: TC/2025/00353
VAT – input tax – validity of invoices – reasonableness of refusal of HMRC to accept alternative evidence – appeal dismissed
Before
TRIBUNAL JUDGE MATTHEW DONMALLDR CAROLINE SMALL
Between
PLAT UK LIMITEDAppellantTHE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMSRespondentKris Cho of BH1 Accounting Limited for AppellantGift Nyoni, litigator of HM Revenue and Customs’ Solicitor’s Office for RespondentsDECISION

Introduction

[1]The Appellant is a VAT registered company engaged in selling luxury goods such as designer handbags to consumers in South Korea. The goods are mostly sourced from Harrods, and otherwise from designer retailers such as Louis Vuitton and Dior.[2]This is an appeal against the decision of HMRC of 7 August 2024 (‘the Decision’), upheld on review, to assess the Appellant for VAT across periods 11/20 to 08/23 in the cumulative amount of £470,894 (‘the Assessments’). The Decision was made on the basis that the Appellant was not entitled to input VAT claimed across those periods in that amount, because it did not hold valid invoices for the relevant input supplies (all over £250 in value) and because HMRC was not satisfied on the basis of alternative evidence that the claims should be allowed.[3]There are two main issues in the appeal. First, the Appellant contends that it did hold valid invoices (‘the Valid Invoice Ground’), so the input tax should not have been refused.Second, the Appellant contends that the exercise of HMRC’s discretion to accept alternative evidence for the input tax claims was unreasonably exercised (‘the Discretion Ground’). There is no separate challenge as to the quantification of the Assessments per se.[4]For the reasons set out below, we dismiss this appeal on both grounds. The legal framework Possessing a VAT invoice is a condition for exercising the right to deduct input tax

The legal framework

[5]The Value Added Tax Act 1994 (‘VATA’) provides as follows, in respect of the ability to deduct the “input” VAT on supplies that a taxable person has purchased for the purposes of its business:(1) Under section 24(1), “input tax” is the VAT on the supply to him of any goods or services, and VAT paid or payable on the importation of any goods, being goods or services used or to be used for the purpose of any business carried on or to be carried on by him.(2) Section 25(1) provides that a taxable person shall in respect of supplies made by him “account for and pay VAT” by reference to prescribed accounting periods, and s.25(2) entitles him to credit for so much of input tax as is allowable and to deduct that amount from any output tax that is due: Subject to the provisions of this section, he is entitled at the end of each prescribed accounting period to credit for so much of his input tax as is allowable under section 26, and then to deduct that amount from any output tax that is due from him.(3) Section 26(2) limits the entitlement to input tax to such input tax as is attributable to taxable supplies.(4) Section 24(6)(a) sets out a precondition for treatment of VAT on the supply of goods to a taxable person as input tax, namely it must be evidenced and quantified by reference to documents specified in regulations: Regulations may provide— (a) for VAT on the supply of goods or services to a taxable person and VAT paid or payable by a taxable person on the importation of goods to be treated as his input tax only if and to the extent that the charge to VAT is evidenced and quantified by reference to such documents or other information as may be specified in the regulations or the Commissioners may direct either generally or in particular cases or classes of cases;[6]The regulations made under section 24(6) are the Value Added Tax Regulations 1995 (‘VATR’). These provide:(1) Regulation 13(1) requires that where a registered person P makes a taxable supply in the UK to a taxable person, P must provide such person with a VAT invoice. Regulation 13(5) requires such an invoice to be provided within 30 days of the time when the supply takes place.(2) Regulation 14(1) sets out what a VAT invoice must include (subject to regulation 16 which makes provision for supplies worth no more than £250, not relevant in the present appeal). Among other things, it must include “a description sufficient to identify the goods or services supplied”:
“(1) Subject to paragraph (2) below and regulation 16 save as the Commissioners may otherwise allow, a registered person providing a VAT invoice in accordance with regulation 13 shall state thereon the following particulars— (a) a sequential number based on one or more series which uniquely identifies the document, (b) the time of the supply, (c) the date of the issue of the document, (d) the name, address and registration number of the supplier, (e) the name and address of the person to whom the goods or services are supplied, (g) a description sufficient to identify the goods or services supplied, (h) for each description, the quantity of the goods or the extent of the services, and the rate of VAT and the amount payable, excluding VAT, expressed in any currency, (i) the gross total amount payable, excluding VAT, expressed in any currency, (j) the rate of any cash discount offered, (l) the total amount of VAT chargeable, expressed in sterling, … (3) Regulation 29 is central to the present appeal. It provides that at the time of claiming deduction of input tax a person shall hold a document as required under regulation 13, subject to a discretion on the part of the Commissioners to allow alternative evidence. We will return to this in dealing with the relevant caselaw below. “(1) Subject to paragraph (1A) below, and save as the Commissioners may otherwise allow or direct either generally or specially, a person claiming deduction of input tax under section 25(2) of the Act shall do so on a return made by him for the prescribed accounting period in which the VAT became chargeable, save that, where he does not at that time hold the document or invoice required by paragraph (2) below, he shall make his claim on the return for the first prescribed accounting period in which he holds that document or invoice. … (2) At the time of claiming deduction of input tax in accordance with paragraph (1) above, a person shall, if the claim is in respect of- (a) a supply from another taxable person, hold the document, which is required to be provided under regulation 13; … provided that where the Commissioners so direct, either generally or in relation to particular cases or classes of cases, a claimant shall hold or provide such other evidence of the charge to VAT as the Commissioners may direct.”
[7]The centrality of a compliant VAT invoice was demonstrated in the Court of Appeal decision in ZipvitLtd v HMRC [2018] EWCA Civ 1515. There, Henderson LJ held the taxpayer’s inability to produce a compliant VAT invoice in support of its claim to deduct input tax was fatal to its claim [117].[8]In FS Commercial Ltd v HMRC [2026] EWCA Civ 29, the Court of Appeal reiterated that the VAT invoice serves the function of proof to the entitlement to the input tax, in a discussion at [33-52] which concluded: 52. These cases show, in my judgment: i) The invoice is a pivotal part of the VAT system. ii) Its function is to enable tax authorities to ensure that VAT is correctly levied and corrected. For that purpose, it is a form of proof. iii) An invoice does not fulfil its function if it is not made available to the tax authorities. iv) If the relevant invoices are not produced to the tax authorities on request, they may refuse to allow a deduction unless they are given other information which is sufficient to establish entitlement to exercise the right to deduct. v) But any such evidence must be presented to the tax authorities before they adopt a decision to refuse a deduction. Evidence presented after that time does not compel the tax authorities to revisit a decision they have already adopted.[9]It is to be noted that this need for the invoices to be available to the tax authorities on request dovetails with the statutory requirement in regulation 29(1) and (2) that the invoice is to be held at the time of claiming the deduction of input tax. This is because if a taxpayer holds the invoice when making the claim, the taxpayer will be able to produce it if requested by the tax authorities.[10]There are therefore two ways by which a taxable person can evidence the input tax such as to be able to exercise the right to deduct that input tax.(1) The first is by satisfying HMRC that it held a compliant VAT invoice at the time when the relevant VAT return was made.(2) The second is if HMRC are satisfied on the basis of alternative evidence, i.e. within the discretion provided for in regulation 29(2).[11]In Tower Bridge GP Ltd v HMRC [2022] EWCA Civ 998 the Court of Appeal considered the nature of the reg 29(2) discretion. At [125], it held: 125. As we have seen from the EU case law the court has held that national tax authorities should allow defective invoices to be corrected by the subsequent supply of information which ought to have been in the invoices in the first place but was not. That is the primary purpose of HMRC’s discretion under regulation 29.(emphasis added)

The jurisdiction of this Tribunal

[12]Section 73 VATA empowers HMRC to make an assessment “where it appears to the Commissioners that such returns are incomplete or incorrect, they may assess the amount of VAT due from him to the best of their judgment and notify it to him”.[13]Section 81(1)(p) provides that an appeal lies to the Tribunal in respect of an assessment under section 73(1) in respect of a period for which a return has been made by an appellant.[14]As regards the nature of the Tribunal’s jurisdiction on an appeal where, as here, the assessment has been made following a decision to refuse an input tax claim by the taxpayer:(1) The Tribunal can assess for itself if the invoices that had been provided to HMRC at the time of the decision were valid. In FS Commercial Ltd v HMRC the Court of Appeal held that the later production of invoices after HMRC’s decision refusing input tax was not a basis for challenging that decision.(2) If there were no valid invoices, the Tribunal then has a supervisory jurisdiction in relation to the exercise of HMRC’s discretion under 29(2).[15]As regards the supervisory jurisdiction, the Court of Appeal in Tower Bridge at [126] approved the position taken by Arnold J in HMRC v Boyce [2017] UKUT 0177 (TC): HMRC were being asked to make an exception to the general rule that the right to deduct cannot be exercised without a valid VAT invoice. It is therefore for the taxable person to demonstrate why an exception should be made.[16]The test when exercising the Tribunal’s supervisory jurisdiction of the reg 29(2) discretion is whether the Commissioners exercised their discretion in a way that no reasonable officer could have done so on evidence before at the time, FS Commercial [61-66].

Evidence

[17]By way of documentary evidence, the Tribunal had before it a hearing bundle comprised of 1,522 pages, the Appellant’s Notice of Appeal, a two-page meeting note between the Harrods VAT accountant and Officer Carey dated 4 November 2024, and a five-page “Harrods sample till receipt and invoice” bundle provided shortly before the hearing by the Appellant.[18]The Tribunal additionally heard oral evidence from HMRC’s witness in the case, Officer Carey. There was no witness evidence for the Appellant. We found Officer Carey to be a straightforward and honest witness. The questions that were asked of him largely concerned how and why he reached the Decision in question, which we address further below. Factual Findings Events leading to the Decision of 7 August 2024

Factual Findings

[19]We here set out our findings of fact in respect of the main chronology of events leading up to the Decision.[20]On 29 August 2023, Officer Carey issued an opening letter informing the Appellant that a VAT verification would be undertaken into the 05/23 VAT return in which a repayment of £79,903.48 was claimed. The letter requested information and documents set out in a schedule, which included the question “Do you obtain a full, detailed VAT Invoice for every one of your purchases?”.[21]On 11 September 2023, the Appellant responded. A completed schedule of information was signed by the director Christina Kyungjin Lee saying that 80% of the input VAT came from supplies bought from Harrods, and that the director was directly engaged in purchasing goods for resale. It also stated that a VAT invoice was not obtained for their purchases. Ms Lee specifically ticked “Yes” to the question “Is the VAT period under review, similar to any previous VAT periods, in terms of suppliers used, customers supplied and how transactions have been made and received?”. An accompanying document explained that the business involved selling luxury brands to South Korea via online platforms, with the goods being delivered by Global Shipping Master UK Ltd (‘GSM’). Ms Lee stated, “I am sole employee of PLAT UK LTD, I do have supports from GLOBAL SHIPPING MASTER UK LTD (known as GSM UK) employee as buying assistant (can’t able to carry all the goods myself).”[22]A large volume of information was provided by way of the Appellant’s agent at the time, Accountant Pro Ltd on 13 October 2023 by way of eight folders. This contained documents about the onward sale and shipping of items to the Appellant’s customers and documents to evidence its input costs, including the following:(1) Two “client receipts” from Dior store in London Sloane Street, for purchases on 23 May 2023 and 2 June 2023 of various items made out to Ms Seymour KIM United Kingdom (‘the Dior Store Receipts’).(2) A “client receipt” from the Dior concession in Harrods, London, for six items purchased on 16 May 2023, made out to Ms Seymour KIM with an address from South Korea, together with a customer copy till receipt from Harrods of the same date and value (‘the 16 May Dior Harrods receipts’).(3) A “client receipt” from the Dior concession in Harrods for five items on 9 May 2023, made out to Ms Merry WATSON United Kingdom, with a customer copy Harrods till receipt of the same date and value, indicating Rewards No …8923 being used (‘the 9 May Dior Harrods receipts’).(4) A Harrods receipt for six Gucci items dated 11 May 2023 using Rewards No …0561 (‘the 11 May Gucci Harrods receipt’).(5) A Selfridges till receipt for a purchase of two Dior items, which is undated and does not state to whom the sale was made (‘the undated Selfridges receipt’).(6) A Louis Vuitton invoice from an online order for two items at total cost £3,300+VAT, made out to Ki Shik KIM with a London address. Inserted in red text onto the PDF is the following “Due to individual purchase volume restrictions, I asked Ki shik Kim, director of parent company (Global Shipping Master UK Ltd), to purchase goods from Louis Vuitton.” (‘the Kim Louis Vuitton invoice’).(7) An invoice from GSM dated 30 April 2023, for services that included “Pick & Pack inc. Photo work, Buying” at £5,695.47 + VAT (emphasis added) and an invoice from GSM dated 31 May 2023 including the same service for £5,539.90 (‘the GSM Invoices’).[23]On 2 November 2023, HMRC sought VAT detailed reports for all VAT returns from 11/19 to 05/23, which the Appellant provided on 10 November 2023.[24]On 14 November 2023, further VAT return information was requested and provided in respect of 08/23.[25]On 24 November 2023, HMRC wrote a pre-decision letter, with a schedule of assessment in the amount of £458,766 for VAT periods 02/20 to 05/23. Officer Carey set out his preferred view, which was that all the purchases appeared to have been made in retail stores or via retail websites, and purchased through undisclosed agents, to whom the retailers understood the sales to be being made as retail customers, such that they were not supplies directly to the Appellant under section 47(2A) VATA (which provides that where goods are supplied through an agent who acts in his own name, the supply shall be treated both as a supply to the agent and as a supply by the agent). His alternative view was that the Appellant did not hold valid VAT invoices and so could not exercise the right to deduct input tax. He noted that he did not believe it appropriate to exercise discretion under regulation 29(2). Officer Carey wrote “Please let me know if you’d like to comment on my calculation or give me any more information. If you hold any documentary evidence, issued at the time of supply, showing these were B2B supplies to Plat UK Ltd, please provide it before I issue the decisions.” In the course of the letter he made following points:(1) The Harrods purchases were evidenced with a retail till receipt, suggesting Harrods considered the supply was made to a retail customer.(2) Harrods reward scheme points were claimed on each purchase, suggesting that the purchases were not commercial. He cited paragraph 1.2 of the Harrods Rewards Terms and Conditions: “Rewards Cards are limited to one per person and are for personal use by the registered cardholder only. Rewards Cards cannot be shared, distributed or used for commercial purposes.”(3) Numerous membership numbers had been used.(4) Additional sales documents in respect of Dior at Harrods indicated that the goods were being supplied to private individuals.(5) For online purchases from Louis Vuitton, the contractual terms indicated again a retail sale to a consumer: “We only sell our retail products to consumers. Your order... must not be made for or on behalf of any business activity and must be placed strictly for your personal use.”(6) He cited similar terms for Dior online and distance sales: “The Items are intended to be sold exclusively to end buyers who are individuals, acting exclusively in a personal capacity or for a gift (hereinafter the “Customer(s)” or “You”) and who are not involved in any commercial activity (such as resellers or intermediaries acting on behalf of resellers).”(7) Different individuals were identified as receiving the supplies.[26]On 11 December 2023, the Appellant’s former representative sent an email in response. It included the following: The company director was unaware that Harrods was not supplying to resale, and Harrods was not informed of this before making sales. The director went to Harrods to get their VAT invoices from them. However, Harrods told them that they only issue 10 invoices per day. Our client has stopped their business and is trying to get all invoices from Harrods. However, as mentioned above, Harrods provides only 10 invoices daily, which takes considerable time. Would you consider this compliance check until they gather their invoices from Harrods? We hope that you consider this letter to postpone your final decision on this company.[27]On 20 December 2023, Officer Carey wrote to the Appellant refusing to delay his decision, among other reasons because it was too late now to obtain a valid VAT invoice. On the same day, he issued Notices of Assessments, covering periods 02/20 to 05/23 in the amount of £458,766 referring to the reasons detailed in his 24 November 2023 letter (the Initial Decision).[28]The Appellant then obtained new representation, namely Mr Cho of BH1 Accounting Ltd, who has continued to act for it subsequently and appeared before the Tribunal. On 15 January 2024, the Appellant sent in additional records, comprising a substantial number of Harrods invoices that had been issued on 9 to 11 January 2024, in respect of transactions from June to August 2023 (the Harrods Invoices), and asking for an independent review. Mr Cho stated that “It is our understanding that these documents were not previously submitted due to a lack of clear instructions from the client's former accountant regarding the necessary records to substantiate their input tax claim.” He contended that with the submission of the Harrods VAT invoices, the argument that the supplies were personal acquisitions by individuals was untenable.[29]Officer Carey responded on 15 January 2024 stating that he had uploaded the additional records to the case file, and that he had reviewed Mr Cho’s comments and the additional records but that would not change the Decision, noting (among other things) that he did not consider that the Harrods Invoices were valid VAT invoices or reflected the supplies that took place.[30]On 10 July 2024, the review officer cancelled HMRC’s 20 December 2023 (‘the Initial Review’). The explanation was brief, stating “Officer Carey’s decisions cannot be supported for the reasons set out in the decision letters”, and that the case was returned to Officer Carey to enable further consideration of the information provided. (We note in passing that in the subsequent review of the Decision, the review officer noted “It is worth noting that the previous decision was cancelled at review because it had not been demonstrated that the discretion to consider alternative evidence had been considered before concluding that input tax recovery should be denied”).[31]On 15 July 2024, Mr Cho emailed Officer Carey stating: Nice to e-meet you. I think you may not be aware, but we are the newly appointed accountancy firm that’s been supporting Plat UK from the independent review stage. As per the content of the attached document drafted by the independent reviewer, it appears that we need to re-discuss this case. Could you let us know how you’d like to approach this? We look forward to hearing from you soon.[32]On 24 or 25 July 2024, a set of documents which are entitled in the hearing bundle index “Harrods document resent 24072024”, and comprising HSBC bank records and 115 Harrods Invoices were re-sent to HMRC. There is no cover email or other documentation of that date in the hearing bundle before us. However, we note that the Decision letter includes an assertion to that effect and likewise the later review letter of 15 January 2025 sets out a history including “On 15 July 2024, your representative approached Officer Carey to discuss your case and followed up on 25 July 2024.”Combined with the title of the set of documents in the hearing bundle we are satisfied on the evidence before us that the Harrods Invoices were re-sent on this date by the Appellant’s representative.

The Decision of 7 August 2024

[33]On 7 August 2024, Officer Carey issued a ‘notice of assessment of VAT due covering VAT period 11/20 to 08/23 in the cumulative amount of £470,894. This is the Decision which is challenged by way of this appeal. We therefore set out the component elements in some detail.[34]Officer Carey started by stating that following the Initial Review which cancelled the Initial Decision, the case had been “returned to me to reconsider the evidence. I have now reconsidered the evidence; this letter details that reconsideration and notifies you of my new decision.”[35]He started by specifically considering the Harrods Invoices that had been provided after the Initial Decision:
“I note the zip file “platkj-202306021” provided both on 15/01/2024 and 25/07/2024 and containing 115 documents in relation to purchases from Harrods”
. He concluded that this did not comply with the requirements of reg 14 as they did not have a description sufficient to identify the goods supplied.[36]He went through the other purchase evidence before him, including what we have above characterised as the 16 May Dior Harrods receipts, the 9 May Dior receipts, the 11 May Gucci Harrods receipt, the Kim Louis Vuitton invoice, the undated Selfridges receipt, and the HSBC bank account and credit card documents. He noted that the credit card was occasionally used in an unusual manner, for example to complete 16 separate transactions in Harrods in the same day. He concluded that none of these forms of documentation were compliant VAT invoices to the Appellant.[37]He also referred to the sales evidence and observed “Records provided do indicate goods are being purchased in retail stores in the UK and supplied to customers in Republic of Korea, using various online platforms. A linked business, Global Shipping Master UK Ltd, is responsible for both shipping goods and purchasing some goods on behalf of Plat UK Limited.”[38]He then stated his conclusion that as the Appellant had not supplied valid VAT invoices to support all of its claim for input tax, it did not have the right to deduct the same.[39]He then turned to the discretion under regulation 29(2): I have considered all provided alternative evidence to decide whether there is other satisfactory evidence that a taxable supply, on which VAT was charged and accounted for by the supplier, was made to Plat UK Limited. I am not satisfied there is other evidence which I have been provided with that satisfies me that your claim for input tax should be allowed. From reviewing the evidence, no purchase invoices have been provided confirming the specified goods were supplied to Plat UK Limited. Invoices naming other individuals and contradictions between Harrods invoices and till receipts do not enable me to be certain Plat UK Limited was the receiver of the supplied goods. The use of GSM employees to purchase goods on behalf of Plat UK Limited, with invoices made out in those employee’s names (including GSM Director) adds further uncertainty as to who was the recipient of the supplies. Commercial invoices do not prove the company making the sales was Plat UK Limited, they show goods being despatched from individuals at other addresses and transported by GSM overseas. The Company was aware of the requirement to hold valid VAT invoices before submitting claim to input tax however submitted those claims despite not holding that evidence. The Company appears to have only attempted to obtain valid VAT invoices after being contacted by HMRC. I have considered there is evidence showing supplies were paid for using the business credit card, however this does not show conclusively who received the supply. You have provided invoices from Harrods. HMRC has, in the past, agreed that Harrods could issue ‘VAT invoices’ using certain templates which they had developed. However, in that agreement, HMRC made clear that any such VAT invoice was still required to contain all the particulars required by regulation 14 VATR and, for the reasons that I have given above, I do not consider that the invoice(s) issued by Harrods to you do fully comply with the regulations. Conclusion You have not provided valid VAT invoices to support all of your claim for input tax. As such, you do not have a right to claim that deduction. Notwithstanding this, I have carefully considered whether, in the absence of valid VAT invoices, I am prepared to accept your claim for input tax for VAT periods 11/20 to 08/23. For the reasons referred to above, I am not prepared to exercise my discretion to accept one, and your input tax claim in respect of the VAT periods is refused. The denied input tax relating to period 08/23 is calculated based on the individual suppliers from the document check. Input tax claimed on invoices of £250 or less have been allowed. The denied input tax relating to periods 11/20 – 05/23 is calculated to best judgment based on your estimation of purchases from each supplier.[40]In terms of the timing of the Decision of 7 August 2024, Officer Carey in his oral evidence openly volunteered that he regretted not having corresponded with the Appellant further before the Decision, i.e. following the Initial Refusal and Mr Cho’s email of 15 July 2024. However, he confirmed that he did review all the material that had been provided including the Harrods Invoices that had been supplied in January 2024 (and, as we find above, which had been resent in July 2024) prior to reaching the Decision. He added that there was time pressure because there had been delays in the review period and he was being asked to resolve the financial position. He also stated that he had reviewed the information that was subsequently provided in September 2024 and that would not have changed his Decision.[41]Officer Carey also expanded in his oral evidence about the “contradictions” between the Harrods Invoices and the till receipts to which his letter referred. These included the fact that the 9 May Dior Harrods receipts were to Ms Merry Watson, i.e. there was no indication that in that transaction, Harrods was making a supply to the Appellant. Likewise with the 16 May Dior Harrods receipt to Ms Seymour Kim at a South Korea address. So even assuming a Harrods VAT invoice had been retrospectively obtained for these transactions (and we note that all the Harrods Invoices were only obtained in January 2024, and related to transactions in June to August 2023), it would not cohere with them in that way. Likewise, he referred to the fact that multiple Rewards cards had been used (see the 9 May Dior Harrods receipts and the 11 May Gucci Harrods receipt) as indicating purchases by multiple individuals understood by Harrods as purchasing in a personal non-commercial capacity. He explained his view that brands such as Dior and Gucci have restrictions upon sales to protect their brand, and that was in effect what the Appellant was trying to get round. We understand this to be a reference to the restrictions cited in the terms and conditions cited in his 24 November 2023 letter, that sales were made on a retail basis and not for commercial re-selling.[42]He also made clear that he was not alleging that there were onward supplies of the goods to South Korea. The issue for him was the evidence establishing the right to deduct and the supply chain by which the Appellant obtained the goods for onward sale.

Subsequent events

[43]On 3 September 2024, the Appellant requested an independent review of the Decision. In that letter, Mr Cho made various points, including that the Decision was produced “without exchanging a single word with our side after his first decision was cancelled” and stating that in respect of the Harrods Invoices, Officer Carey “could have confirmed any missing details from the corresponding till receipts”. He added “the client also wishes the invoices to be precisely in line with the legislation. However, small businesses like Plat UK Limited can’t exert sufficient influence on their big suppliers to amend their invoice formats”. Additionally, the correspondence attached VAT invoices from Selfridges, which are the records that the officer had not seen before, but which could have been presented to him (the Selfridges Invoices). The attached Selfridges Invoices were all dated 21 August 2024, for transactions that ranged in date from July 2021 to April 2023.[44]On 19 September 2024, Officer Carey wrote to Mr Cho reiterating that he had considered the documentation that was provided in January 2024, i.e. the Harrods Invoices. He further explained that he considered the present case was relatively close to that in Boyce v HMRC [2017] UKUT 177, in which Mr Boyce had used individuals to acquire motor cars on his behalf, as the till receipts indicated that the supplies were made to non-taxable persons and the GSM invoices indicated GSM were providing a service where they acquired goods for the Appellant. He also accepted that he did not check all the purchases over the assessed periods due to how lengthy a process it would be but rather tested a sample and used it across different periods. He added that “Your client advised, in their original questionnaire response, the business has operated in a similar manner since beginning trading. I believe this approach is reasonable and a similar approach was approved in a recent Tribunal decision – Ancient & Modern Jewellers Limited v HMRC…”.[45]On 4 November 2024, Officer Carey had a virtual video meeting with Harrods VAT accountant, Jay Majevadia (‘the Harrods Meeting’). This was first to discuss queried purchases in another case, for which reason some of the document is redacted. However, there was then a brief discussion about invoicing by Harrods generally. Officer Carey’s notes of the meeting are as follows: We then had a brief discussion about the invoicing issued by Harrods. My usual understanding is: a retail transaction takes place, a "NT-123-4567" receipt is issued, with no identified customer. At a later date, a business emails a photo of the till receipt, or attends a service desk in-store and requests a VAT invoice made out to a business. Harrods produce a document with similar details "T-123-4567" showing the supply date as that of the original transaction - if the sale was via a concession, the "invoice" will only indicate the concession "brand," if the sales was by Harrods (like the purchase being queried here) the invoice will contain details of each item. JM confirmed when a business customer was set up, Harrods would check companies house and check the VRN via HMRC. He also reconfirmed, when the sale takes place, it is a retail supply at the point-of-sale, Harrods are not aware the supply might be being made to a taxable person, nor do they have the name and/or address of the customer. I asked if Harrods could tell if the person returning with the till receipt, to request the invoice, was the same person that made the original purchase (or had a link to them) - JM confirmed they could not. Theoretically anyone could return with someone else's till receipt and have VAT invoice created. JM confirmed there "VAT invoice" system is being amended to prevent duplicate invoices being produced or invoices created from cancelled transactions. (*from an unrelated check an invoice had been created from a refunded transaction - it appeared to be a cancelled transaction (similar to the deposits situation above) where the customer wanted a paper receipt from the till instead of the electronic retail invoice produced from an online transaction.) I also Queried how the VAT account looked after the production of the VAT invoice - JM confirmed the sale remains declared as a retail sale to an unknown customer within the retail scheme in the VAT account. The original point of sale transaction is not amended in any way, there is no supply showing as being made to a taxable business. The created business VAT invoices, do not appear within the Harrods VAT account - the fact they have been created stands separately to the accounting system. I raised a concern that the till receipt evidences the supply was made to a non-taxable person and the later produced business VAT invoice indicates a supply to a known taxable business - they would appear to contradict each other.[46]On 17 January 2025, HMRC upheld the Decision on review, the review officer agreeing that there were not valid invoices and considering that HMRC acted reasonably in choosing not to exercise the discretion.

The Harrods and Selfridges Invoices

[47]Finally, we make the following findings in respect of the Harrods Invoices and the Selfridges Invoices.[48]The Harrods Invoices all made reference to the Appellant with an address in Hounslow and the Appellant’s VAT number. Two fields seemed populated from till receipt details, namely: “Invoice No (Till/Trans No)” and “Invoice Date (Till/Trans Date)”, the latter all being dates in June to August 2023. All the Harrods Invoices themselves were issued from 9 to 11 January 2024, subsequent to the VAT returns in which the input tax had been claimed. In the section of the document where you would expect to find the goods described, under “Description” there was just a reference to the concession in question, for example “Dept Sales – Celine Conc” for each item in the transaction, and the “Article No.” was also the same, we infer according to the concession.[49]The Appellant in its skeleton argument had advanced a contention that HMRC had explicitly permitted Harrods to utilize this specific non-standard invoice format. This was not maintained before us in the hearing. While there was an email dated 30 January 2023 from Mr Majevadia, VAT Accountant at Harrods, referring to HMRC giving permission to use a bespoke template, Mr Cho for the Appellant accepted that this was not the template that had been adopted in the Harrods Invoices. Further, Officer Carey stated that HMRC maintained that VAT invoices had to include all the statutory requirements under regulation 14. For the avoidance of doubt, therefore, we find that there is no evidence that HMRC approved purported invoices in the form of the Harrods Invoices before us as valid.[50]As regards the Selfridges Invoices, these were not provided to HMRC before the Decision. In any case, these share the same deficiency, under item description just stating (for example) “Celine”.

Preliminary point: the late challenge to the extrapolation to earlier periods

[51]Before turning to the two main grounds of challenge, we first consider as a preliminary matter one further submission that the Appellant made, for the first time, on the final day of the hearing: that it was unreasonable for the Commissioners to have proceeded to issue the Assessments in respect of earlier periods back to 11/2020 on the basis of a sample of evidence from 2023.[52]HMRC objected to the inclusion of this new ground of complaint, Mr Nyoni submitting that HMRC was prejudiced in its ability to respond because they had not advanced notice of it. Mr Nyoni went on to state that in any case, it was not a meritorious complaint, given that the Appellant’s own declaration was that the VAT period in 2023 under review was similar to previous VAT periods in terms of suppliers used and how transactions were made and received.[53]In our decision, the Appellant should not be permitted to advance this new ground so late, but in any case we would have rejected it. In our judgment it was entirely reasonable for HMRC to extrapolate their conclusions to periods back to 11/2020. As Mr Nyoni submitted, the Appellant itself asserted that its business was similar in previous periods (paragraph 21 above). In particular, at no point had the Appellant obtained valid VAT invoices from Harrods at the time of the claimed purchases in question and they did not hold valid VAT invoices when they submitted their claims for the deduction of input tax. We note that the reasonableness of extrapolation of findings in a similar way was upheld by Judge Amanda Brown KC in Ancient & Modern Jewellers Ltd v HMRC [2024] UKFTT 774 (TC) at [231-232]. The valid invoice ground The arguments of the Parties

The valid invoice ground

[54]The Appellant in its skeleton argument had contended that the Harrods Invoices were in themselves “full, proper corporate invoices from Harrods”. In oral submissions, Mr Cho sensibly conceded that the Harrods Invoices did not comply with regulation 14(1)(g), not giving a description sufficient to identify the goods, although he initially described this as “a minor imperfection”.[55]However, the Appellant pursued a contention that there were valid invoices on the alternative basis that the Harrods Invoices together with till receipts would constitute valid invoices. This submission was based on the recent Tribunal decision in Athena Luxe v HMRC [2025] UKFTT 01507 (TC), which Mr Cho submitted was materially identical to the present.[56]Athena Luxe concerned invoices issued by Harrods in the same format as the Harrods Invoices before us. The example that the Tribunal considered was appended in an annex, involved the purchase of nine items from Hermes, all described on the purported invoice as “DEPT SALES – HERMES CONC”. There was also a till receipt for the transaction, which listed out the reference details for each item, and stated “Hermes Kelly 25 II retourne”, as the Tribunal found at [8]. HMRC contended that the purported invoice did not give sufficient detail of the goods purchased. However, the Tribunal (Judge Brooks and member McBride) disagreed, as they concluded that when the Harrods invoice was combined with the till receipt there was a valid invoice: 27. In Fount Construction Limited v HMRC [2024] UKFTT 340 (TC) the Tribunal (Judge Frost and Mr McBride), having set out a passage from the decision of the Tribunal in Deadoc Construction Limited v HMRC [2015] UKFTT 433 at [58] in relation to the level of detail required on an invoice by regulation 14 VATR, observed: “13. We consider that the purpose of the description required by the statute is twofold:(1) Firstly, to enable both the recipient and supplier of the supply to have a common understanding of which services the invoice relates to, so that they can complete their respective VAT returns accurately.(2) Secondly, to provide HMRC with a means of understanding the essential nature of the supply and a means of identifying the supply in correspondence with the recipient or the supplier in order to seek more information as needed. 14. We do not agree with HMRC’s suggestion that the invoice description needs to be in such detail as to enable HMRC to draw definitive views on the VAT treatment of the supply from the invoice alone. HMRC have wide-ranging powers to seek further information in relation to the supply, and to refuse recovery of input tax if such information is not supplied. The invoice is the gateway into any enquiries by HMRC, rather than a repository for the answers to any questions that might be asked.” 28. Ms Abolude relied on the same argument that the Tribunal rejected at [14] in Fount Construction, ie that the information on invoice alone should be sufficient for HMRC to draw a definitive view. However, she was unable to advance any argument, let alone a convincing one, that the Tribunal in Fount Construction was wrong. 29. As such, and as a matter of judicial comity (ie although not binding, the Tribunal would follow and apply a previous decision of the Tribunal in a similar case unless it considered the previous decision to be clearly wrong), applying Fount Construction (which we consider was correctly decided) to the present case we find that the Harrods invoice, when considered together with the corresponding till receipt, is a valid invoice that satisfies the requirement of regulation 14(1)(g). This is because, as we have noted at paragraph 8, above, it provides a description sufficient to identify the goods or services supplied. (emphasis added)[57]In the light of Athena Luxe, the Appellant argues that as the Appellant has till receipts that corresponded with each of the Harrods Invoices, put together there would be compliant VAT invoices, giving detail of the goods in question through the till receipts. To that end, the Appellant produced before the Tribunal the five-page Harrods sample till receipt and invoice document. In fact, this material had not been put before Officer Carey at the time of the Decision; the Harrods Invoice in question related to a transaction in March 2023, although not issued until 4 January 2024. However, the Appellant’s point was that the Appellant could have put such material before HMRC.[58]For their part, HMRC contend that the Harrods Invoices are not valid invoices under regulation 14, lacking description of the goods. As regards the Athena Luxe argument, Mr Nyoni sought to distinguish Athena Luxe on the basis that first, Athena Luxe was only concerned with the deficiency in description of goods, whereas in the present case HMRC also had concerns that the Appellant was not directly the recipient of some of the supplies made by Harrods. So whereas in Athena Luxe, the till receipt and the subsequent invoice harmonised, the same could not be said here. Second, the Harrods Invoices in the present case were only obtained by the Appellant after the VAT had been reclaimed by the Appellant and after HMRC had commenced a compliance check.

Discussion

[59]We consider that of themselves, the Harrods Invoices are not compliant VAT invoices, because they lack a sufficient description of the goods as required under reg 14(1)(g). Indeed, they do not describe the goods at all, save for the brand in question as identified in the reference to the concession. As already noted, this conclusion is not itself contentious, as Mr Cho conceded that on their own, the Harrods Invoices did not suffice for VAT invoices. As the Selfridges Invoices were not provided to HMRC before the Decision, they do not form a basis to challenge that decision, but in any case, they too are invalid for the same reason. The only valid invoice before us was the Kim Louis Vuitton invoice, however that was not made out to the Appellant at all, but to Ms Kim at a South Korea address, so also cannot constitute a valid invoice for the Appellant.[60]We also reject the Appellant’s argument that the Harrods Invoices together with till receipts would be valid invoices under reg.14.[61]First, that argument still relies in part on the Harrods Invoices, and the Appellant did not hold the Harrods Invoices at the time of making its claim to input tax in its VAT returns. The Harrods Invoices were only obtained later, in January 2024.Reg 29(1) and (2) are in our judgment clear in stating that a person claiming deduction of input tax must hold a valid VAT invoice at the time when the claim is made: Reg 29(1):
“…a person claiming deduction of input tax under section 25(2) of the Act shall do so on a return made by him for the prescribed accounting period in which the VAT became chargeable save that, where he does not at that time hold the document or invoice required by paragraph (2) below, he shall make his claim on the return for the first prescribed accounting period in which he holds that document or invoice.”
Reg 29(2) “At the time of claiming deduction of input tax in accordance with paragraph (1) above, a person shall, if the claim is in respect of– (a) a supply from another taxable person, hold the document which is required to be provided under regulation 13;”[62]There is nothing surprising about this legislative requirement. Given that the supplier must provide an invoice within 30 days of the date of the supply, under reg 13(5), it follows that the recipient of the supply will generally have that invoice at the time when submitting its return – and if it does not, then it must wait until it does have the invoice before making a claim. The provisions of regulation 29 in this way cohere with the principle established in the case law about that a taxable person must hold an invoice in order to exercise the right to deduct. Because, by submitting a VAT return claiming input tax deduction, the taxable person is seeking to exercise the right to deduct, that taxable person must hold a valid invoice at that point.[63]If a valid invoice is not held at the time of claiming deduction, then under regulation 29(2), the claim to input tax then becomes a matter of HMRC’s discretion under that regulation, because the qualification at the end of reg29(2) (“provided that where the Commissioners so direct, either generally or in relation to particular cases or classes of cases, a claimant shall hold or provide such other evidence of the charge to VAT as the Commissioners may direct”) is the only qualification to the mandatory nature of reg 29(2)(a).[64]This first issue is of itself sufficient to dismiss the Appellant’s case on this ground.[65]Second, we would in any case respectfully depart from the reasoning in Athena Luxe, which is not binding upon us. We do not agree that it is possible to treat two documents – a purported Harrods invoice and a Harrods till receipt – as a single composite VAT invoice which meets reg.14 requirements.(1) This would be contrary to the natural reading of the legislative provisions. Reg 13(1) refers to the requirement to provide “a VAT invoice” – i.e. a single document. Likewise, reg 14(1) sets out what “a VAT invoice” must state upon it – again, in our view, a single document. Likewise, reg 29(2), in referring to “the document” (singular) which is required to be provided under reg 13.(2) It would be inconsistent with the purpose of the discretion under reg 29(2), as elucidated by case law. As discussed at paragraph 11 above, in Tower Bridge the Court of Appeal considered that the primary purpose of that discretion is to allow defective invoices to be corrected by the subsequent supply of information which ought to have been in the invoices in the first place. If, as in Athena Luxe, the invoice lacked description of the goods, the fact that a till receipt might describe the goods does not mean that there is a single valid invoice: rather, it might give HMRC grounds to exercise their discretion to find that the missing information has otherwise been provided.(3) It would be problematic in practice to allow for a notional composite “VAT invoice” to be comprised of two (or more) documents, one being a document described on its face as an invoice, and another such as a till receipt. In the present case, the Appellant has itself proceeded on the basis that an invoice is a single document, and when the Harrods Invoices were provided in January 2024, they were described as “VAT invoices”. In other words, the fact that the Appellant did not provide paired Harrods Invoices and till receipts, in our judgment, itself reflects the normal understanding that a VAT invoice will be a single document, rather than being comprised of “purported invoice plus till receipt read together”.(4) We do not consider that Fount Construction Ltd v HMRC [2024] UKFTT 00340 (TC), to which the Tribunal referred in Athena Luxe, supports the proposition that multiple documents can together constitute a VAT invoice; that case was limited to considering whether the description of the services (in that case) in the invoice was sufficient for reg 14(1)(g).[66]Third, even if we were wrong on both the first and second points, we would still have found that the Appellant could not establish its claim, because as a matter of fact the Appellant did not provide paired Harrods Invoices and till receipts to HMRC prior to the Decision. The only example of a paired receipt was provided after the Decision. The discretion ground The arguments of the Parties

The discretion ground

[67]The Appellant argued that the Decision was flawed in four main ways.(1) First, the Appellant contends that Officer Carey misunderstood the nature of the reg.29(2) discretion and should have addressed himself to the substantive issue of whether the Appellant was purchasing the products and then selling the products. It accordingly argues that Officer Carey refused to consider relevant evidence.(2) Second, the Appellant contends that the Decision was procedurally unfair because Officer Carey failed to review the Harrods Invoices (in the language of its skeleton: “ignoring the primary evidence on file”).(3) Third, the Appellant contends that the Decision was procedurally unfair because Officer Carey proceeded to make the Decision after the Initial Refusal “without exchanging a single word” with the Appellant’s new agent.(4) Fourth, the Appellant contends that the Decision was procedurally unfair because Officer Carey should have invited the Appellant to provide the till receipts which corresponded to the Harrods Invoices, if he considered that they were deficient in respect of the description of the goods.[68]HMRC rejected these criticisms. Mr Nyoni submitted that Officer Carey approached the discretion appropriately, did consider the material before him, was entitled to proceed without inviting further material in general or till receipts in particular, and reasonably exercised his discretion for the reasons set out in the Decision.

Discussion

[69]We also dismiss the appeal on this ground. We consider that Officer Carey’s Decision was one which a reasonable body of Commissioners could have reached. In particular, it was reasonable for him to have had a concern that the goods were not being supplied by Harrods to the Appellant at the point of sale, which concern was not addressed to his satisfaction on the evidence. This was because, among other things:(1) Individuals other than the Appellant’s director and “sole employee” Ms Lee were involved in purchasing (for example Ms Kim, Ms Watson), see paragraphs 21-22 above.(2) The fact that Ms Kim was director of GSM, and was involved in buying goods, was consistent with GSM invoicing for “Buying” services supplied to the Appellant (see paragraph 22 above).(3) Items were bought using Harrods Rewards cards, which terms and conditions specified could only be used for retail purchases and not for commercial purposes (paragraph 25 above).(4) The Appellant accepted in correspondence that Harrods was not supplying to resale, i.e. Harrods did not understand it was selling on a commercial basis to the Appellant, and no effort was made to obtain VAT invoices at the time, only after HMRC’s compliance check (paragraph 26 above).[70]We would add that Officer Carey’s concern that the Harrods Invoices, in stating that the goods had been supplied to Plat UK, might not reflect the underlying reality appears to have been subsequently accepted by Harrods VAT accountant himself. In the Harrods Meeting, Mr Majevadia is noted to have accepted that Harrods could not tell if someone subsequently returning with the till receipt to request an invoice was in fact the person that had made the original purchase (paragraph 45 above).[71]It was therefore reasonable in our judgment for Officer Carey to have concluded that the Harrods Invoices were only obtained and provided after the input tax had been claimed, were defective in themselves, and that all the evidence provided to him was not sufficient to establish entitlement to exercise the right to deduct.[72]As to the Appellant’s four specific complaints set out at paragraph 67 above, although Mr Cho articulated the Appellant’s arguments ably, we reject them.[73]First, we do not consider Officer Carey was mistaken in his approach to the discretion in reg 29(2). The Appellant’s argument on this ground was in effect to reduce the reg 29(2) question to the substantive conditions giving rise to the right to deduct (i.e. the goods have been purchased for the purpose of output transactions). This would bypass the condition of requiring an invoice in order to exercise that right entirely. Rather, the case law makes clear that a valid invoice is necessary in order to exercise the right to deduct, and HMRC’s discretion, if there is some defect in such invoice, is directed to considering if that formal evidential requirement is met on alternative evidence, Tower Bridge at [125]. Further, Officer Carey’s concerns in this case amply show why this is not a requirement empty of substance or purpose. A VAT invoice serves the purpose of proving that supplier A has supplied specified goods or services to taxable person B at a certain value on a certain date. In this case, Officer Carey rationally considered that the evidence did not establish that Harrods (or the other retailers involved such as Selfridges, Dior, Louis Vuitton) were selling the goods to the Appellant itself directly.[74]Second, we do not consider that the Decision was procedurally unfair because Officer Carey failed to review the Harrods Invoices. On the face of the Decision, and as confirmed in his written and oral evidence, he did review the Harrods Invoices (see paragraphs 35 and 40 above), and so we reject the factual premise on which this second criticism proceeds.[75]Third, even if before reaching the Decision Officer Carey might ideally have engaged in dialogue with Mr Cho after the Initial Review had cancelled the Initial Decision, that does not render the exercise of his discretion unlawful. It must be borne in mind that the Appellant had been asked for information at the opening of the compliance check in August 2023 and had had opportunity to provide information thereafter; that Mr Cho had himself provided on the Appellant’s behalf further information in the form of the Harrods Invoices in January 2024 and re-submitted the same in July 2024, which was considered in the Decision; and that the task before Officer Carey after the Initial Review was not to seek further evidence, but to reconsider his decision in the light of the evidence before him. Officer Carey was also reasonably conscious of the length of time that the review process had taken.[76]Fourth, we do not consider that the Decision was procedurally unfair in that Officer Carey did not invite the Appellant to provide the till receipts which corresponded to the Harrods Invoices. The Appellant had already had ample opportunity to provide evidence and had done so on multiple occasions. Further, for the reasons already given above, Officer Carey’s concern in the Decision was not merely that the Harrods Invoices lacked the requisite description of the goods, but that the underlying evidence did not substantiate the claim that these goods had been directly supplied to the Appellant. The retail till receipts that were already before HMRC indicated that multiple individuals were buying the goods as retail customers. For those reasons, we do not consider that it was unreasonable to have proceeded without asking the Appellant for more till receipts.

Conclusion

[77]For these reasons, the appeal is dismissed.

Right to apply for permission to appeal

[78]This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice. Release date: 02 July 2026