UUÂãÁÄÖ±²¥

Basics of VAT recovery

For VAT to be recovered by a business (or other VAT registered person), it must:

1. •

   have incurred ‘input tax’ in the first place

2. •

   be entitled to recover that input tax

VATA 1994, ss 24, 26; VIT12100

Whether input tax has been incurred

For input tax to have been ‘incurred’ by a business, the following conditions must be satisfied:

1. •

   the VAT must have been incurred for business purposes

2. •

   the VAT must have been properly charged

3. •

   the business must be the recipient of the supply

VATA 1994, s 24(1); VIT10100

Input tax in this context can be VAT incurred on UK supplies