The appellant (“ANL”) promoted circulation of its Sunday newspapers by first purchasing vouchers from retailers such as Marks & Spencer and from an intermediary ("Hut"), and providing such vouchers to readers, who purchased the newspaper during the promotional period, who then could redeem the vouchers with the retailer against the purchase of goods. (The purchases of vouchers from Marks & Spencer were found later in the judgment to not be subject to VAT.) Patten LJ noted (at para. 30) that in order for ANL to be entitled to recover any input tax on its purchases of the vouchers, the applicable legislation required that ANL establish either a direct and immediate link between the purchased vouchers (which were deemed to be for services) and relevant taxable transactions of ANL or that the cost of the vouchers were part of the ANL overheads and, therefore, cost components of the its taxable activities – but that if its purchases of the vouchers should be treated as directly (and exclusively) linked to the free supply of the vouchers to its customers, any input tax would be irrecoverable.
In addressing this issue, Patten LJ discussed at length the Sveda case (ECLI:EU:C:2015:712),  BVC 36), which found input tax to be recoverable on goods purchased in constructing a 'Baltic mythology recreational/discovery path,' which was subsidised by the Lithuanian government on the basis that there would be free public access to it, but with Sveda intending to sell food or souvenirs. Patten LJ then stated, in connection with finding that ANL was entitled to input tax under the Sveda principle (at paras 48, 51):
[I]n economic terms, the cost of purchasing the vouchers was also part of ANL's overall expenditure in the production and sale of its newspapers which the vouchers were intended to promote. The fact that the vouchers were provided free to buyers of the newspapers merely serves to confirm that they were cost components of the business rather than the onward supply of the vouchers.
… [A] simple causative test of whether the newspapers could have been produced and sold without the benefit of the vouchers does not answer the question of whether the cost of the vouchers was economically a cost component of those supplies and that business when the vouchers were acquired in order to sell the papers.