½ΫΧΣΚΣΖ΅

What is input tax?

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

What is input tax?

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

This guidance note provides an overview of what conditions need to be met before a business is entitled to treat VAT incurred as input tax. This note should be read in conjunction with the other notes in the β€˜Claiming input tax’ subtopic.

For a flowchart outlining the procedure for claiming input tax, see the Flowchart ― procedure for claiming input tax.

What is input tax?

The term β€˜input tax’ includes the following:

  1. β€’

    VAT incurred on goods and services that have been supplied to a taxable person

  2. β€’

    for transactions prior to 1 January 2021, VAT incurred on the acquisition of goods from another EU member state (acquisition tax)

  3. β€’

    VAT paid or payable on imported goods (import VAT)

VATA 1994, s 24(1); SI 1995/2518, reg 29(1)

The VAT must be used, or intended to be used, for the purposes of the business carried or intended to be carried on by the person receiving the supply.

VAT paid on the above only becomes β€˜input tax’ if it meets the conditions outlined below.

What

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+β„’
Powered by
  • 14 Jul 2020 14:00

Popular Articles

Allowable expenses for property businesses

Allowable expenses for property businessesGeneral itemsMany of the principles applying to allowable expenses for property businesses are similar to those that apply for trading and the rules for individuals in a property business are generally the same as for companies with some exceptions which are

14 Jul 2020 13:26 | Produced by Tolley in association with Rob Durrant-Walker of Crane Dale Tax, part of AMS Group Read more Read more

Exporting goods ― proof of export

Exporting goods ― proof of exportIn addition to the requirements laid down in the Exporting goods ― overview guidance note, businesses intending to zero-rate exported goods must hold satisfactory evidence that the goods have been delivered to a destination outside of the UK. If satisfactory evidence

15 Dec 2020 14:02 | Produced by Tolley Read more Read more

Short-term business visitors (STBVs)

Short-term business visitors (STBVs)What is a short-term business visitor?An STBV for UK tax purposes is an individual who performs duties for a non-UK employer and as a part of those duties has been asked to spend a short period working in the UK. There is a common misconception that there is

14 Jul 2020 13:40 | Produced by Tolley in association with Gill Salmons Read more Read more