The European Court of Justice (ECJ) delivered a preliminary ruling for Case No. C-156/20 on 13 January 2022, clarifying the VAT deduction regulations in the United Kingdom. A VAT-registered business cannot claim refund if the underlying transaction was incorrectly deemed to be exempt from VAT and as a result, invoices did not include a reference to the tax. It is important to note that input tax cannot be deducted unless the recipient of the supply has an invoice showing the VAT separately.
Source GlobalVATcompliance
ECJ Judgment HERE
