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HMRC internal manual

VAT Input Tax

How to treat input tax: when input tax can be claimed

The timing of input tax claims has a direct effect on the overall payment (or repayment) made or received in any given tax period.

The basic rule that says when input tax may be claimed is set out in regulation 29(1) of the VAT General Regulations 1995. VIT11500

Regulation 29 (2) deals with evidence for deducting input tax. VIT11500 

You cannot deduct input tax before the tax has been incurred.

For practical purposes this means:

  • for supplies of goods and services - the tax point VAT Time of Supply 
  • for goods acquired from another Member State - the date of acquisition VAT Single Market 
  • for imported goods - the date of the import declaration IMPS Imports; and
  • for goods removed from a customs and/or excise warehouse - the date of removal V1-19: VAT Imports: Customs Procedures with Economic Impact, End-Use Relief & Free zone 

Only someone who is a “taxable person” at the time the relevant supplies were received can exercise the right to deduct input tax. Someone who is registered for VAT in the UK is recognised as being a taxable person.