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HMRC internal manual

VAT Input Tax

Is it input tax: general principles

A business will only have incurred input tax if all the following conditions are met:

  • there has actually been a supply, import or acquisition of goods or services;
  • the supply took place in the UK;
  • the transaction on which the tax was incurred was taxable at a positive rate;
  • the supply was made to the person claiming the deduction;
  • the recipient intends to use the goods or services for the purposes of their business;
  • the expenditure was not made for private or other non-business purposes;
  • the supply received must not be subject to input tax restriction in the form of a Treasury “blocking order”;
  • the recipient was a taxable person at the time the tax was incurred, or the tax was eligible for relief under regulation 111; and
  • the supplier was a taxable person at the time of the supply.

You can read more about business purpose at VIT10200.

Page VIT21000 talks about how the ability to claim input tax is linked with the making of taxable supplies.

You can read more about the definition of input tax at VIT12500.

There is more about the time at which input tax can be claimed at VIT30500. How to treat late claims to input tax is dealt with at VIT33000.