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The windfall

30 April 2013 / Neil Warren
Issue: 4400 / Categories: Comment & Analysis , VAT

A practical option for claiming input tax on expenses that relate to non-taxable sales


  • Don’t miss the opportunity to recover input tax even though output tax is not charged.
  • Place of supply and reverse charge calculations.
  • Outside the scope supplies are ignored for registration purposes.
  • Inclusion of sales in Box 6 of the VAT return.
  • VAT changes for some business to consumer supplies.

True or false: input tax can only be reclaimed by a business if the expense in question relates to a taxable supply.

The answer is false and this article will highlight an important opportunity for a UK business selling services abroad to claim input tax on its expenses even though it is not accounting for output tax on its sales. This is the best possible outcome in the world of the nation’s favourite tax: producing a net...

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