United Kingdom Tax Tribunal Clarifies Input VAT Recovery for Online Retailer With Integrated Financial Services

The United Kingdom First-Tier Tax Tribunal Dec. 16, 2025, issued a judgment in Case No. TC09731, clarifying input VAT recovery for an online retailer with integrated financial services. The taxpayer, a company providing online retail goods and associated financial products, claimed that costs for product-specific photographs used in catalogues and its online store were solely for taxable retail supplies and thus eligible for full input VAT recovery. The Tax Agency contended that these costs were linked to exempt financial services, making them mixed-use and only partially recoverable. On appeal, the Tax Tribunal found that: 1) the photography costs were used ...