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Where Taxpayers and Advisers Meet

VAT payback rules query

Posts: 2
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)?

Posts: 538
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.

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