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HMRC internal manual

VAT Agricultural Flat Rate Scheme

HM Revenue & Customs
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Operation of the scheme: reclaiming the flat rate addition

VAT-registered traders who are charged the flat rate addition (FRA) are allowed to reclaim the amount charged as though it were input tax. They should reclaim the amount on their VAT return in the normal way, but must first make sure that they obtain a valid invoice from the flat rate farmer.

If a VAT-registered person is charged the FRA but:

  • no invoice is issued, or
  • the invoice issued does not contain all the particulars required by the regulations,

the VAT-registered person will not be entitled to reclaim the amount charged; and any such claim should be disallowed.

In addition, if a VAT-registered person has been charged the FRA on non-designated supplies, there is no entitlement to recover the charge.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)