This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

VAT payback rules query

AngryVATman
Posts: 1
Joined: Wed Aug 08, 2018 11:06 pm

VAT payback rules query

Postby AngryVATman » Wed Aug 08, 2018 11:10 pm

Client didn't claim any VAT on substantial costs in 2013, however this was an error by the bookkeeper - the intention at the time was that the fees related partly to the creation of a taxable supply and partly to private/non-business. Later, however, there was a change of intention and the entire expenditure became related to taxable supplies.

Can any VAT be recovered? VIT25600 states "If the business has not recovered any VAT on the basis that the initial intention was to use the goods or services for wholly non-business or private use the expense is not a business cost and no input tax can ever be recovered regardless of any subsequent business use. This principle was confirmed by the CJEU’s decision in the case of Waterschap Zeeuws Vlaanderen (see VIT62520)", however it was only due to an error (which was never corrected) that no VAT was originally claimed - the fact was that at the time the intention was that VAT related to both non-business activities and taxable supplies.

Is it worth seeking a ruling from HMRC, or am I clutching at straws? Also, could the Capital Goods Scheme be used to get back some of the original VAT (expenditure > £250k)?

les35
Posts: 528
Joined: Wed Aug 06, 2008 3:09 pm

Re: VAT payback rules query

Postby les35 » Fri Aug 10, 2018 8:54 am

Can you make a claim under regulation 109? This has a six year limit.


Return to “VAT & Excise Duties”