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HMRC internal manual

VAT Input Tax

HM Revenue & Customs
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VAT Input Tax basics: unusual circumstances


Claims for input tax in the absence of a VAT invoice

HMRC staff should give a customer every chance to produce evidence to support its claim to input tax. Normally a business can ask its supplier for a valid VAT invoice when one is not available right away. Sometimes this may not be possible, for example if the supplier is missing. HMRC staff should balance the need to protect the revenue against the need to ensure that businesses pay no more tax than is properly due from them.

Claims for input tax where trader deals in “goods subject to widespread fraud”

Some businesses operate in a trade sector that is subject to widespread fraud. When they do, the conditions listed in the basic right to deduct principles (see VIT12100) have to be met. They should take reasonable commercial steps to ensure their supplier and the relevant supply is genuine. Businesses in other trade sectors are not expected to meet these extra conditions.

These requirements are set out in a Statement of Practice. They relate to supplies of the following goods made on or after 16 April 2003:

  • computers and any other equipment, including parts, accessories and software, made or adapted for use in connection with computers or computer systems;
  • telephones and any other equipment, including parts and accessories, made or adapted for use in connection with telephones or telecommunications;
  • alcoholic liquors liable to excise duty, which are defined by section 1 of the Alcoholic Liquor Duties Act 1979 or in any regulations made under that Act: for example spirits, wines and fortified wines, made-wines, beer, cider and perry; and
  • oils that are held out for sale as road fuel.

HMRC staff checking input tax claims on purchases of goods subject to widespread fraud will refer to the procedure chart at VIT12300.

Claims for input tax where the recipient of a supply has been charged a sum purporting to be VAT by a non-authorised person

Sometimes an invoice wrongly represents a sum of money as VAT. When this happens the recipient of the supply cannot treat that amount as input tax. Special arrangements apply instead. These are set out in Extra Statutory Concession 3.9