LAMINAS DE AGUA SUBTERRANEA
10. Presupuesto del proyecto
Input tax is the VAT you are charged on your business purchases and expenses, including:
goods and services supplied to you in the UK;
goods you import from outside the EC;
goods you acquire from a taxable person in another EC member state (see Notice 725 The single market);
goods you remove from a warehouse;
any services supplied in the UK which you receive from abroad; and
overheads and research and development costs.
This guidance explains the basic rules about input tax. It is in four sections:
Section Subject
10 Introduction and general rules
11 VAT paid on goods and services obtained before registration 12 Subsistence, staff entertainment and domestic accommodation
expenses
10.2 What can I reclaim as input tax?
You can normally reclaim input tax that relates to:
supplies you make which are liable at the standard rate, reduced rate or the zero rate (see Section 3);
supplies you make which are outside the scope of UK VAT but
which would be taxable supplies if they were made in the UK; and
supplies of services you make to a person who belongs outside the EC or supplies of services you make which are directly linked to the export of goods to a place outside the EC and the making of arrangements for such supplies, provided the supply would have been exempt by virtue of any item of Group 2, or any of items 1 to 8 of Group 5, of Schedule 9 to the VAT Act 1994.
You will find more information about supplies of services in Notice 741A Place of supply of services.
10.3 What can’t I reclaim as input tax?
You cannot normally reclaim VAT you have been charged:
on goods and services not used for your business (see paragraph 4.6.3);
on goods and services obtained before VAT registration (see Section 11);
on a car, including fitted accessories and delivery charges (see Notice 700/64 Motoring expenses);
on business entertainment expenses (see Notice 700/65 Business entertainment);
if you are a developer, on certain articles that are installed in buildings that you sell or lease at the zero rate (see Notice 708 Buildings and construction);
on purchases that fall within the Tour Operators’ Margin Scheme (see Notice 709/5 Tour operators’ margin scheme);
on goods sold to you under one of the VAT second-hand schemes (see paragraph 8.5);
on assets of a business transferred to you as a going concern (see paragraph 26.10); and
10.4 How do I reclaim input tax and what
amount can I claim?
10.4.1 How you reclaim
You reclaim your input tax by deducting it from your output tax when you fill in your VAT return. If your input tax is greater than your output tax, you reclaim the
difference from us.
10.4.2 Amount of input tax
If… Then…
you can reclaim input tax in full the amount to reclaim will be the amount of VAT shown on the VAT invoice from your supplier.
the invoice is a less detailed VAT invoice (see paragraph 16.6.1) which does not show the VAT charged separately
your input tax will be the VAT fraction of the total amount charged for any
standard-rated supply (see paragraph 7.3.1).
This must be the VAT fraction for the rate of VAT in force at the time of supply (tax point). See Sections 14 and 15.
10.5 What are the timescales for reclaiming
input tax?
You should normally claim input tax on the VAT return for the period during which the supplier’s tax point occurred or, for imported goods, the date of the importation. The timescales for EC acquisitions are given in Notice 725 The single market. The tax point (time of supply) will be shown on your supplier’s invoice.
You must also hold the associated evidence to claim deduction of input tax. If you are unable to claim input tax in the normal period because you do not hold the necessary evidence you should claim the input tax on the VAT return for the period during which you receive that evidence.
If you are approved to use the cash accounting scheme described in paragraph 19.3 you must also have paid for the supply. You can find full details of the scheme in Notice 731 Cash accounting.
If you do not claim deduction of the input tax on the return for the period in which you were first entitled to deduct it, this is an error. You cannot deduct it on a later return. If you wish to correct such error, you will need to do so in accordance with the methods explained in section 4 of Notice 700/45 How to correct VAT errors and make
adjustments or claims. The time limit for claiming deduction of input tax is 4 years from the due date for the return on which you were first entitled to claim deduction of the input tax.
10.6 What evidence do I need to claim input
tax?
You must keep certain records to be able to reclaim input tax. See Section 19 for details.
To reclaim VAT you have been charged as input tax, you must hold valid evidence that you have received a taxable supply. You can find what counts as acceptable evidence in paragraph 19.7.
10.6A Repayment of input tax if you do not pay
your supplier
For supplies received on or after 1 January 2003 you are required to repay any input tax you have reclaimed if you have not paid your supplier within six months of: (a) the date of supply (usually taken as the invoice date), or if later
(b) the due date for payment.
Notice 700/18 Relief from VAT on Bad Debts contains more detailed information on this.
10.7 Refunds of VAT paid in other countries
If you buy goods or services in another Member State of the European Community or in other countries, you may have to pay VAT there. This should not happen if you buy goods for export from that country, but it may apply if, for example, you take part in a trade exhibition.
You cannot treat the VAT of another EC Member State as input tax, but you may be able to reclaim the VAT from the authorities in that Member State if:
the VAT was paid on goods or services for your business;
you do not make taxable supplies in the other country; and
You may also be able to claim refunds of VAT or similar turnover taxes incurred in some non-European Community countries.
You can find more about this in Notice 723A Refunds of VAT in the European Community for EC and non-EC businesses.
10.8 What other publications may help me?
You will find it helpful to read Notice 700/15 The Ins and Outs of VAT, which provides a brief guide to input tax and output tax.
Special rules apply if you are a body covered by section 33 of the Value Added Tax Act 1994. See Notice 749 Local authorities and similar bodies.