The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
This guidance note provides an overview of the VAT recovery rules relating to costs that are used for both business and private purposes, and what businesses need to do if the use of an asset changes.
Please see the Business and non-business guidance note for details of assets that are used for both business and non-business purposes. This note also provides more information on the types of apportionment businesses must undertake to calculate the amount of recoverable input tax incurred on assets that are used for both business and private purposes.
See the Change of use guidance note for the VAT treatment of assets where the business has changed the use of those assets (ie the taxable use and either gone up or gone down).
In 1991, the CJEU issued a judgement that businesses should be entitled to deduct all of the VAT incurred on the purchase of goods that would be used for both business and non-business purposes. The Court established the following:
Lennartz C-97/90 ; VIT25540, VIT25510; 2006/112/EC, Articles 26(2), 75 ; VATA 1994, Sch
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