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HMRC internal manual

VAT Refunds

Late claims for input tax: Time limits general

Regulation 29 of the VAT Regulations 1995 provides that, normally, input tax must be deducted in the return for the accounting period in which the entitlement to deduct it arose.

The entitlement to make a claim to deduct input tax arises in the accounting period in which the taxable person has both incurred the input tax and received the documentary evidence, that is to say the VAT invoice, to support its deduction.

From 1 April 2009, the taxable person has four years from the due date of the return for the accounting period in which the entitlement to make the claim to deduct arose in which to make a late claim for input tax - the transitional arrangements for the change from three years to four is set out at VR6800.

For example,

Ali Ltd is accounting for VAT in accounting periods ending 31 March, 30 June, 30 September and 31 December. It incurs input tax on the purchase of a crate of widgets on 25 January 2007. It gets the VAT invoice on 21 April 2007. The entitlement to deduct the input tax has arisen in the accounting period ending on 30 June 2007 and the due date for the return for that accounting period is 31 July 2007. Thus Ali Ltd has until 31 July 2011 to claim that input tax.