Andrew Needham looks at recovering input tax in practice and the evidence that may be needed other than the purchase invoice.
Businesses must overcome a number of hurdles in order to claim back input tax; it’s not just as simple as having a purchase invoice.
Any input tax claimed by a business must relate to a supply that has actually taken place. For example, where a payment has been made and an invoice received but the goods or services were never physically supplied, input tax should not be claimed as no supply has taken place.
In a First-tier Tribunal case (David Peters Ltd v HMRC  UKFTT 124 (TC)), the taxpayer was allowed to reclaim the input tax on a purchase they had paid for and had a valid invoice for, but which was lost in the post. The tribunal considered that a supply had actually taken place and the goods had existed but had just been lost in transit.