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Input tax recovery after trade has ceased

Sole trader ceased but still paid lease charges on coffee machine

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On first principles I would say that the input tax is not receoverable as it is not directly linked to a taxable supply. Or is it? Can it be argued that the supply was the whole of the lease obligation which happened at the time when taxable supplies were made. Therefore, the payment of the lease after cessation of trade is linked to the taxable suuply made in the past. Hence, an input tax recovery under VAT form 427 could be possible?

Does anybody have any detailed knowledge of this?


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22nd May 2019 19:03

Interesting point.
I fear HMRC will reject such a claim on the basis that the taxpayer has ceased to make taxable supplies. And they will not enter into any carefully thought-through explanation!

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to leshoward
03rd Jun 2019 08:46

Thanks Les.

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22nd May 2019 23:02

It’s VAT, not philosophy.

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to andy.partridge
03rd Jun 2019 08:48

Andy. I doubt that anybody at HMRC will know what philosophy is, let alone enter a debate. If only my client had the resources to take this point on.........

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