V6.307 Recovery of VAT

V6.307 Recovery of VAT

Conditions for VAT recovery

Where VAT is incurred by a s 33 body that is directly attributable to a non-business activity, it may be recovered in full, provided that VAT has been charged correctly and the required evidence is obtained in the form of a valid VAT invoice or receipt. It is worth noting, however, that HMRC do have discretion to accept alternative evidence.

The full requirements are that, generally, the local authority must—

  1.  

    (i)     place the order;

  2.  

    (ii)     receive the supply;

  3.  

    (iii)     receive a tax invoice addressed to the local authority; and

  4.  

    (iv)     pay from the local authority's own funds (including funds awarded to it, such as lottery funds).

There are blocking orders on certain types of supply, meaning that VAT cannot

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