- A business needs a valid tax invoice to claim input tax on expenditure.
- HMRC may accept alternative evidence if there is no VAT invoice.
- HMRC staff must consider whether there is satisfactory alternative evidence of the taxable supply.
- HMRC staff should work through a checklist to determine if alternative evidence is credible.
- The checklist includes questions about the business’s evidence of receipt of a taxable supply, payment, consumption or onward supply of goods/services, knowledge of the supplier, and relationship with the supplier.
- If the responses to the checklist are credible, HMRC staff should allow the taxpayer to deduct the input tax.
- A business can challenge HMRC’s decision not to allow a claim if HMRC acted unfairly or unreasonably.
- The taxpayer must demonstrate that HMRC was unreasonable in not using its discretion.
- There is significant case law on this subject, including the Upper Tribunal (UT) cases of James Boyce Scandico Ltdv and Wasteaway Shropshire Limited.
- It is best to always obtain a proper tax invoice from a supplier.
- The level of evidence required when no invoice is held usually depends on the value of the claim.
Source: marcusward.co
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
