When can a person recover VAT?
Produced in partnership with Michael Ridsdale of Wedlake Bell LLP
When can a person recover VAT?

The following Tax practice note produced in partnership with Michael Ridsdale of Wedlake Bell LLP provides comprehensive and up to date legal information covering:

  • When can a person recover VAT?
  • Why can VAT be recovered?
  • What can be recovered?
  • How is VAT recovered?
  • How is input tax attributed to supplies made by a business?
  • How is input tax attributed to supplies made by a business—examples
  • Can VAT be recovered just because it appears on a VAT invoice?
  • Does a person have to actually make supplies before it can recover VAT?
  • Can VAT be recovered before the taxpayer is registered for VAT?
  • Can input tax be recovered when it has not been paid?
  • More...

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marks the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. At this point in time (referred to in UK law as ‘IP completion day’), key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see Practice Note: What does IP completion day mean for Tax?

Why can VAT be recovered?

To understand when a person can recover VAT it is important first to appreciate why they are able to.

The Council Directive 2006/112/EC (the VAT Directive) states that:

‘The principle of the common system of VAT entails the application to goods and services of a general tax on consumption exactly proportional to the price for the goods and services, whatever the number of transactions which take place in the production and distribution process before the stage at which tax is charged.

On each transaction, value added tax, calculated on the price of the goods and services at the rate applicable to such goods or services, shall be chargeable after deduction of the amount of value added tax borne by the various cost components.’

The effect of these principles is that:

  1. VAT is borne by the end consumer (as explained in the

Popular documents