Carpet trader: insurance claim

Littlejohn (t/a Carpet Trades) (1984) 2 BVC 205,100 replaced water-damaged carpets in a hotel and charged £13,587 plus VAT of £1,648.50. The hotelier’s insurance company paid £13,587 which was expressed to be VAT-exclusive. The insurance company did not pay the VAT element, because the hotelier could recover it as input tax. However, the hotelier went into liquidation without paying the appellant. The tribunal decided that the bad debt refund was restricted to the VAT element of the outstanding amount of the consideration, which was £1,648.50.

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