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Input tax recovery on grant income

Where the purchased equipment is used for business activity - input tax recoverable?

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Hello

A Community Interest company received a grant to purchase a 'walk in' fridge to use in it's warehouse.  The warehouse is used entirely to support their taxable business activity.

The grant is outside the scope income but as the purchase of the fridge is going to be used exclusively to support their taxable activity, is the input tax recoverable?

I think yes.  but would like a second opinion

thanks

 

 

 

 

Replies (8)

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By the_drookit_dug
08th Sep 2021 16:32

I agree - the input tax is recoverable.

Thanks (1)
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By David Ex
08th Sep 2021 16:36

As a matter of interest, was the grant claimed for the VAT inclusive or exclusive amount?

Thanks (1)
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By hairyfingers
08th Sep 2021 16:38

Hi

It was claimed vat exclusive then they reclaimed the vat.

It was the treatment of both those elements really I wanted to check. but sounds like it's OK

thanks

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Replying to hairyfingers:
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By David Ex
08th Sep 2021 18:42

hairyfingers wrote:

Hi

It was claimed vat exclusive then they reclaimed the vat.

It was the treatment of both those elements really I wanted to check. but sounds like it's OK

thanks

Not sure that the claim is in any way linked to the basis of the grant but I was just interested!

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By Paul Crowley
08th Sep 2021 17:05

All sounds good to me

Thanks (1)
Jason Croke
By Jason Croke
08th Sep 2021 17:19

+1 for reclaim the VAT.

Thanks (2)
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By jonharris999
08th Sep 2021 17:40

It's perfectly OK. The outputs that go with the input are the taxable business activities, not the grant income.

Thanks (3)
By ireallyshouldknowthisbut
08th Sep 2021 17:49

There are two transactions

1. Grant income, book to income

2. Cost of fridge, presumably a fixed asset

Book 'em like that and follow the tax on each leg and you will be fine.

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