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The ‘dos’ and ‘don’ts’ of claiming back input tax

Shared from Tax Insider: The ‘dos’ and ‘don’ts’ of claiming back input tax
By Andrew Needham, May 2022

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 [2012] 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. 

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