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In Mr NO Turner trading as Turner Agricultural (Queen’s Bench 29 April 1992), Mr Turner had been a director of another business that had gone into liquidation. He took legal action against the liquidator and a firm of solicitors which he lost. He was ordered to pay their costs including the VAT element which he then reclaimed through his agricultural business.

HM Customs & Excise had assessed for input tax incorrectly claimed since the supplies were not made to Mr Turner. This decision was upheld at Tribunal and also at a subsequent appeal to the High Court with further leave to appeal refused. »Ê¹ÚÌåÓýapp decision was based on the meaning of “input taxâ€� in what was then section 14 (now Section 24) of the VAT Act and the High Court confirmed the Tribunal chairman’s view when he said:

»Ê¹ÚÌåÓýapp words in Section 14(3)(a) â€� make it clear that tax paid by [the taxpayer] can only be “input taxâ€� within the meaning of the Act if it is tax on a supply of goods or services which is supplied to him. »Ê¹ÚÌåÓýapp services, the tax upon which [the taxpayer] claims as input tax, were the services of solicitors instructed by the defendants in the two actions. »Ê¹ÚÌåÓýappse services, it seems to me, were supplied not to him but to their clients, the defendants in the actions, and for this reason the tax cannot be input tax.