VATPOSS14400 - Reverse charge: input tax, partial exemption, groups

Input Tax

If a non-UK trader is not registered in the UK, but makes supplies on which the customer accounts for VAT under the reverse charge procedure, the non-UK supplier can reclaim UK VAT relating to those supplies by means of the UK refund system set up under section 39 of the Value Added Tax Act 1994. This is described in Notice 723A: Refunds of UK VAT for non-UK businesses or EU VAT for UK businesses.

Partial Exemption

Section 8(3) of the VAT Act 1994 provides that supplies of services which are treated as made by the recipient for reverse charge purposes are not to be taken into account as supplies for the purposes of determining any allowance of input tax under the partial exemption rules.

You can find more on this in the PE - VAT Partial Exemption Guidance (PE) : Partial exemption guidance and in Notice 706: Partial exemption.