TC09611 - [2025] UKFTT 00987 (TC)

Section 24(1) VATA defines input tax as being:

“VAT on the supply to him of any goods or services … being (in each case) goods or services used or to be used for the purpose of any business carried on or to be carried on by him.”

Section 25 VATA allows for the credit of input tax against output tax, and where there is no output tax due, or the amount of credit exceeds that of the output tax, to credit for input tax as is allowable under section 26.

Section 26(2) VATA allows for input tax under section 25 where there are “supplies made or to be made by the taxable person in the course of furtherance of his business.”

Regulation 29(1) of the VAT Regulations 1995 states that input tax shall be claimed in the prescribed accounting period in which the VAT became chargeable. This is unless the required evidence is not held, in which case input tax shall be claimed on the return for the first prescribed accounting period in which the evidence is held. This is, however, subject to the time limit for claiming in Regulation 29(1a), being within four years of the due date by which the return for the first accounting period in which the taxable person was entitled to claim that input tax was required to be made.

In terms of Schedule 9, Group 1, item 1, VATA the grant, assignment or surrender of interest in, right over or licensed to occupy land is exempt from VAT.

Section 73(2) VATA provides as follows:

“(2)

In any case where, for any prescribed accounting period, there has been paid or credited to any person—

(a)

as being a repayment or refund of VAT, or

(b)

as being due to him as a VAT credit,

an amount which ought not to have been so paid or credited, or which would not have been so paid or credited had the facts been known or been as they later turn out to be, the Commissioners may assess that amount as being VAT due from him for that period and notify it to him accordingly.

Section 73(6) VATA provides as follows:

“73(6) An assessment under sub-section (1), (2) or (3) above of an amount of VAT due for any prescribed accounting period must be made within the time limits provided for in Section 77 and shall not be made after the later of the following –

(a)

2 years after the end of the prescribed accounting period; or

(b)

one year after evidence of facts, sufficient in the opinion of the Commissioners to justify the making of the assessment, comes to their knowledge,

but (subject to that section) where further such evidence comes to the Commissioners’ knowledge after the making of an assessment under subsection (1), (2) or (3) above, another assessment may be made under that sub-section, in addition to any earlier assessment.”

Section 77 VATA provides, in as far as is relevant:

“(1)

Subject to the following provisions of this section, an assessment under sections 73, 75 or 76, shall not be made–

(a)

more than 4 years after the end of the prescribed accounting period or importation or acquisition concerned, …”.