How to Make Sure You Get the VAT Refund You Are Entitled To

VAT-registered businesses can claim Input tax against the goods and services they buy/use, and this Input tax could adjust to output tax, reducing the amount of VAT to pay to HMRC. But the business should get help from a VAT adviser to ensure they get all the VAT refunds they entitle to.

 What is input tax?

Input tax is the VAT incurred by a VAT-registered company on its business expenses. Typically, it can be offset against the output tax that the business charges on its sales, with the net amount owed to HMRC.

Any VAT claimed as input tax must meet all the following criteria:

• the amount claimed must be VAT properly charged by another taxable person or relate to a taxable importation or acquisition;
• the supplies on which the VAT was charged must be made to the person who is claiming the input tax;
• the supplies must have been received for the purpose of the business;
• the supplies must normally be received in the accounting period in which the claim is to be made; see VIT30500
• the person claiming input tax must hold good documentary evidence of the supplies in support of the claim; see VIT31000 and
• the supplies received must not be subject to input tax restriction in a Treasury blocking order.

When:

• the purpose of the business requirement is not obviously met or
• the supplies are not solely used for a business purpose

An item relating to an input tax cannot be validated in the absence of a Valid invoice

No VAT Refunds Will Be Issued Without a Proper Invoice:

Moreover, This was a decision of First Tier Tribunal in a recent case a bed and breakfast business accounted for and claimed input VAT on the rent where they entitle to claim the same in the absence of a valid invoice.

Star Services Oxford Limited v HMRC (TC08573)

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