The Lennartz case established the important principle of accounting for VAT on assets used privately. This case set the principle whereby if goods are purchased for partly private and partly taxable purposes, the whole of the input tax can be deducted; then, in subsequent periods, output tax must be accounted on any private element.
A recent ECJ Case, Vereninging Noordelijke Land-en Tuinbouw Organisatie (VNLTO) v Staatssecretaris van Financien (C-515/07) - VNLTO considered the correct application of the Lennartz principle. HM Revenue & Customs have considered the impact of the VNTLO case and issued Revenue & Customs Brief 02/10.
The brief provides details of when the Lennartz principle can be implemented, effective from 22 January 2010. HM Revenue & Customs provide details for taxpayers incorrectly using Lennartz, they will be taking a lenient approach.