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HMRC internal manual

VAT Refunds

Late claims for input tax: Who can claim: Claims by assignees and transferees

Unlike claims for overdeclared output tax which may be assigned as property, a deduction of input tax may only be made by the taxpayer who made the taxable supplies to which the input tax was attributable.

There are only two sets of circumstances under which input tax can be claimed by anyone other than the person who incurred the input tax.

The first is where the business is transferred as a going concern and the transferee adopts the VAT registration number of the transferor under regulation 6 of the VAT Regulations 1995.

The other is where the transfer of business activities from one person (the original creditor) to another (the current creditor) is governed by statute. Such transfers might be made, for example, under:

  • The Industrial and Provident Societies Act 1965;
  • The National Health Service and Community Care Act 1990; or
  • The Local Government Act 1992.

The extent to which rights to make claims and the liabilities are transferred will be set out in the legislation or in Orders of the relevant Secretary of State made under the appropriate Act of Parliament.

Where a claim is made by an entity other than the one which incurred the input tax being claimed, you should ask the claimant for the details of the legal provisions under which they took over their activities with a view to establishing that they are, in fact, entitled to make the claim.

Under these circumstances, it will probably be the case that the ‘importing’ entity inherits the liabilities as well as the assets and rights of its predecessor.