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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.

The materials on the Eversheds Sutherland website are for general information purposes only and do not constitute legal advice. While reasonable care is taken to ensure accuracy, the materials may not reflect the most current legal developments. Eversheds Sutherland disclaims liability for actions taken based on the materials. Always consult a qualified lawyer for specific legal matters. To view the full disclaimer, see our Terms and Conditions or Disclaimer section in the footer.

Key contacts

RobertWaterson@eversheds-sutherland.com

Robert Waterson

Partner

United Kingdom

edwardgriffiths@eversheds-sutherland.com

Edward Griffiths

Senior Associate

United Kingdom

rebekkasandwell@eversheds-sutherland.com

Rebekka Sandwell

Principal Associate

United Kingdom

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