Section 33 bodies: recoverable VAT: introduction
Section 33(1) (see VATGPB4120) permits qualifying bodies to recover VAT incurred on their non-business activities, subject to some restrictions (see VATGPB4420).
The arrangements apply whether or not a body is registered for VAT or makes taxable supplies. So local authorities are eligible for refunds even though they make no taxable supplies. The method for claiming is described at VATGPB4820.
With the exception of insignificant amounts of input tax incurred on exempt business activities, the scheme is for the refund of VAT incurred on non-business purchases only. Any VAT incurred on purchases for business use may be recovered as input tax subject to the normal VAT rules. Claimants must be able to substantiate their entitlement to all VAT claimed, but they are not required to distinguish between VAT attributable to their business and non-business activities.