Revenue and Customs Brief 36/07
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Issued 11 April 2007
VAT Input Tax deduction without a valid VAT invoice: Revised Statement of
This Revenue & Customs Brief announces the publication of
Input Tax Deduction without a valid VAT invoice – Statement of Practice March 07.
It replaces Input Tax deduction without a valid VAT invoice – Statement of
Practice July 03.
It should be read by all taxpayers dealing in any of the goods subject to
widespread fraud and abuse, namely:
- Computers and any other equipment, including parts, accessories and
software, made or adapted for use in connection with computers or computer
- Telephones and any other equipment, including parts and accessories, made
or adapted for use in connection with telephones or telecommunications.
- Alcohol - those alcoholic liquors liable to excise duty, which are defined
by section 1 of the Alcoholic Liquor Duties Act 1979 or in any regulations
made under that Act (e.g. spirits, wines and fortified wines, made-wines,
beer, cider and perry).
- Oils - all oils that are held out for sale as road fuel.
The revised version of the statement of practice continues to apply in cases
where an invalid invoice is held. It does not apply where HMRC are not satisfied
that a supply has taken place or are questioning the underlying supply. It
incorporates a number of changes to reflect developments in this area and
- clarification on your right to deduct input tax in circumstances where
HMRC question whether there is an underlying supply;
- information about invoices reflecting amendments to Regulations 14
(Contents of VAT invoice) and 16 (Retailers’ invoices) of the Value Added Tax
Regulations 1995 brought about by SI 2003/3220;
- details of the requirement to provide evidence of a supply having being
made in circumstances where no valid invoice is held; how such a supply must
be for its recipient’s business; details of checks needing to be made to
establish the bona fides of a supplier; evidence of normal commercial
arrangements, including payment arrangements and details of how the
relationship between the supplier and buyer was established.
This Revenue & Customs Brief takes effect from the date of its publication.
HMRC guidance will be updated shortly to reflect these changes.
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© Crown Copyright 2007.
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Article Published/Sorted/Amended on Scopulus 2007-04-11 23:44:01 in Tax Articles