VAT review ― purchases

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note is intended to provide an overview of the areas that should typically be considered as part of a VAT review when analysing the input tax recovery position of a business. This document should be used in conjunction with the VAT review checklist Checklist ― VAT review when undertaking a review to seek to ensure all the relevant items have been covered.

While this guidance and associated checklist have been prepared to seek to cover the common issues and risks which might arise, care should be taken to ensure that any specific business or sector issues are considered as part of a comprehensive review.

Private and non-business use

VAT cannot be reclaimed on items that are purchased for a private or non-business purpose. Therefore, during the course of a VAT review, the focus should be two-fold; identifying whether any VAT has been over-recovered to date, and ensuring there are sufficient processes and controls in place to capture any private / non-business usage which might arise.

Typical examples of the types of expenditure

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