½Û×ÓÊÓƵ

Input tax ― conditions for recovering VAT

Produced by a Tolley Value Added Tax expert
Value Added Tax
Guidance

Input tax ― conditions for recovering VAT

Produced by a Tolley Value Added Tax expert
Value Added Tax
Guidance
imgtext

This guidance note looks at the conditions that must be met in order for a business to recover VAT on costs.

For an overview of input tax more broadly, see the Input tax ― overview guidance note.

For in-depth commentary on the legislation and case law in this area, see De Voil Indirect Tax Service V3.401.

Basics of VAT recovery

For VAT to be recovered by a business (or other VAT registered person), it must:

  1. •

    have incurred ‘input tax’ in the first place

  2. •

    be entitled to recover that input tax

VATA 1994, ss 24, 26; VIT12100

Whether input tax has been incurred

For input tax to have been ‘incurred’ by a business, the following conditions must be satisfied:

  1. •

    the VAT must have been incurred for business purposes

  2. •

    the VAT must have been properly charged

  3. •

    the business must be the recipient of the supply

VATA 1994, s 24(1); VIT10100

Input tax in this context can be VAT incurred on UK supplies

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+â„¢
Powered by

Popular Articles

Income tax losses ― overview

Income tax losses ― overviewIncome tax losses can arise due to a number of reasons, but not all losses can be relieved against total income and some losses can only be set against certain types of component income. The table below is a summary of the main reliefs for income tax losses.Summary of

04 Mar 2021 12:19 | Produced by Tolley Read more Read more

Real estate investment trusts (REITs)

Real estate investment trusts (REITs)Introduction to REITsA real estate investment trust (REIT) is in fact not a trust at all, it is a company which qualifies for special tax treatment under CTA 2010, Part 12. REITs are similar in many ways to collective fund vehicles (such as unit trusts) in that

14 Jul 2020 13:04 | Produced by Tolley in association with Rob Durrant-Walker of Crane Dale Tax, part of AMS Group Read more Read more

Withholding tax

Withholding taxIntroductionUK tax must be withheld on UK payments including:•interest•royalties•rental incomeUK withholding tax may be reduced under the provisions of a double tax treaty (DTT). Prior to 1 June 2021, payments of interest and royalties made to EU resident associated companies were

14 Jul 2020 14:01 | Produced by Tolley Read more Read more