VIT12300 - VAT Input Tax basics: procedure for dealing with supplies

HMRC staff should work through these questions to deal correctly with a claim that is not supported by a valid VAT invoice.

First, ask whether the business holds a valid VAT invoice (see VIT31000). If it does, or if it can go back to its supplier and obtain one, you can allow the business to deduct input tax.

If the business does not hold a valid VAT invoice and cannot get one you should find out whether the supply includes goods of a type listed at VIT12200. If it does, go to Step 1. If it does not, go to Step 2.

Step 1

Decide whether the business can give a satisfactory answer to all or nearly all of questions 1 to 6 given at VIT12400. If it cannot, go to Step 4. If it can, go to Step 7.

Step 2

Decide whether the business can give a satisfactory answer to all or nearly all of questions 1 to 4 given at VIT12400. If it cannot, go to Step 3. If it can, go to Step 7.

Step 3

The business has no right to deduct. You should disallow input tax. If the business disputes your decision you should refer the case to Deductions and Financial Services Team.

Step 4

Has Central Co-Ordination Team advised you of a criminal investigation, joint and several liability action, or is Law Enforcement is running a non-economic activity argument? If not, go to Step 5. If so, go to Step 6.

Step 5

Submit the case to Deductions and Financial Services Team for endorsement. Complete the authorisation template.

Step 6

If there is a criminal investigation, or action to apply the joint and several liability measure to the business, do not assess until the case has been endorsed by Deductions and Financial Services Team. If Law Enforcement (LE) is running a non-economic argument, do not assess but refer the case to LE.

Step 7

You can allow the business to deduct input tax.