When can a person recover VAT?

Copyright © 2025 LexisNexis
Published by a LexisNexis Tax expert
Practice notes

When can a person recover VAT?

Copyright © 2025 LexisNexis

Published by a LexisNexis Tax expert

Practice notes
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This Practice Note is about the circumstances in which a person who has incurred VAT on supplies it has received can recover that VAT from HMRC. It covers why VAT can be recovered, what can be recovered, the Rules on the Attribution of input tax to onward supplies, and the procedure for VAT recovery. It also looks at specific situations such as whether VAT can be recovered before a person is VAT registered and whether input VAT can be recovered when it has not been paid.

Why can VAT be recovered?

As explained in Practice Note: What is VAT?, under basic principles, VAT should be:

  1. •

    borne by the end consumer, and

  2. •

    recoverable by those in business at each production/retail stage, provided that their activities are themselves subject to VAT, as explained further in this Practice Note

If a person were not able to recover VAT in this way:

  1. •

    VAT would not be being levied on consumption only, and

  2. •

    the amount of VAT charged along the production chain would exceed the rate of VAT

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Jurisdiction(s):
United Kingdom
Key definition:
EC definition
What does EC mean?

1 European Commission 2 Emergency controller

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