What VAT on purchases cannot be reclaimed?
9th September 2024
Do you know what VAT on purchases cannot be reclaimed? Most input tax incurred by VAT registered businesses can be recovered, however, there is some input tax that may not be.
A list of those areas where input VAT could be blocked is below:
- Where no or incorrect supporting evidence held
- Input tax relating to exempt supplies (and you are not within the partial exemption de-minimis criteria)
- Input tax relating to non-business activities
- Time barred
- VAT incurred on business entertainment
- Car purchase
- Car leasing (50%)
- Fuel costs for private use
- A business using specific VAT schemes
- VAT charged in error
- Goods and services not used for a business
- VAT paid on goods and services obtained before VAT registration (unless within 4 years for fixed assets or stock still held or 6 months for services)
- VAT incurred by property developers
- Goods sold under second hand goods scheme
- Transfer of a going concern (TOGC)
- Disbursements
- VAT incurred overseas
- Business assets of £50,000 and more (Capital Goods Scheme)
Get In Touch
If you are in any way unsure about your entitlement to reclaim VAT incurred by your business, please contact your local Whitings LLP office today.
Disclaimer - All information in this post was correct at time of writing.
