Input tax excluded from credit

V3.440 Introduction

Scope of this section

This section deals with VAT which is input tax but is nevertheless excluded (wholly or partially) from credit, other than as a result of partial exemption (see V3.461–470). For VAT which is not input tax, see V3.405–410.

The right to deduct is governed primarily by arts 168–169 of Directive 2006/112/EC1. This provision is, however, subject to certain modifications, namely—


    (1)     other provisions within the Directive which prevent the recovery of input tax in particular circumstances, ie


      (i)     where it arises in respect of goods obtained under a margin

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