Hotelbeds clarifies HMRC’s discretion to allow input tax recovery

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Hotelbeds clarifies HMRC’s discretion to allow input tax recovery

This article was originally published in the 14 November 2025 edition of Tax Journal

November 24, 2025

United Kingdom
United Kingdom
United Kingdom
In a feature article published in Tax Journal, Robert Waterson, Ed Griffiths and Rebekka Sandwell discuss the recent case of The King (on the application of Hotelbeds UK Limited) v HMRC [2025] EWHC 2312 (Admin).

The High Court allowed the taxpayer’s application for judicial review, deciding that HMRC’s decision to refuse to exercise their discretion to allow the taxpayer’s claims for recovery of input tax on the basis of alternative evidence (in the absence of valid VAT invoices) was unlawful. The case is a salutary reminder for HMRC that they must, in instances where the statutory framework affords HMRC an element of discretion, exercise that discretion (in particular, the discretion contained in regulation 29 of the VAT regulations) in a way which is consistent with general public law principles.

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Robert Waterson

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