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HMRC internal manual

VAT Input Tax

How to treat input tax: estimation of input tax

Under regulation 29(3) HMRC can allow a business to estimate input tax. We will normally do so where there is a genuine reason why the business cannot work out the exact amount.

If we receive a request for estimation we will follow the guidance in VATAC2000.

Any request for permission to estimate input tax on an ongoing basis will normally be refused. Regulation 29(3) only allows a business to estimate its input tax:

  • if it is corrected in the period following the estimation; or
  • if the exact figure is still not known in the period following the estimation it is corrected in the next but one period following the estimation.