A taxable person is entitled to input tax credit at the end of any prescribed accounting period and to deduct the amount of that credit from any output tax that is due from him1. The amount of his credit is so much of his input tax for the period as is allowable2. No deduction may be made except on a claim made in such manner and at such time as may be determined by or under regulations3.
Input tax for a prescribed accounting period is tax on supplies, acquisitions and importations in that period4 which is input tax5 or treated as input tax6 and which is not excluded from credit7.
As regards supplies made to a person, tax becomes chargeable at the time of supply and, subject to the exceptions described below, is thus input tax for the period in which the time of supply occurs8. This is the case even where the input tax concerned is in dispute9.
Regulations10 made under VATA 1994 s 25(1) and (6) provide that a person claiming a deduction for an input tax credit must do so on the return furnished by him for the prescribed accounting period in which the tax became chargeable. However, HMRC may allow or direct otherwise, either generally or in particular cases or classes of cases11. On appeal, a tribunal can intervene only if HMRC have acted unreasonably in refusing to allow otherwise12. However, it