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The recipient of a supply is the person who is entitled to recover the VAT charged as input tax (see VATA 1994, s 24(1)(a)). In Genius Holdings BV v Staatssecretaris van Financiën¹, the CJEU held that:

'the right to deduct provided for in the Sixth Directive [subsequently Archived Directive 2006/112/EC] does not apply to tax which is due solely because it is mentioned on the invoice'.

In Smart Organiser², HMRC disallowed a claim for input tax on the grounds that the relevant supplies (construction services made by subcontractors) had been made directly to the appellant by the subcontractors, rather than through intermediate companies. The intermediate companies had been formed by the foremen working on the construction projects to reduce the number of invoices that the appellant received.

HMRC argued that the intermediate companies could not legally make the relevant supplies under the Construction Industry Scheme (CIS). However, the Tribunal held that the fact that the intermediate companies might not have been in compliance with the CIS rules did not mean