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VAT - If the supply is 'out of scope' for VAT can you still claim back input VAT?

VAT - If the supply is 'out of scope' for VAT...

I have a Ltd company client whose only supply is to the US, so all his output VAT is 'out of scope' but can he calim back input VAT even if he never recieves any out put VAT - he would only ever be reclaiming - does HMRC allow this? seems wierd.....

I know that you can't claim back input VAT on exempt supplies but is this the same scenario?

cheers for any help :)


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17th Feb 2012 16:24

Claim away

Depending on what the supplies being made are (presumably services of some sort) then the supplies are (to give them their full title) 'Outside the Scope of UK VAT with the right of recovery.

Registration is possible on the basiss that the supplies would be taxable if being made within the UK. Accordingly registration is possible and recovery of input VAT allowed.

Before you celebrate too much, what are the services so this can be confirmed?

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By KWallis
to KWest
27th Feb 2012 09:30

Hi Peter

Thanks for your reply, the services are IT based  - website design mainly I think.

cheers Kev

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20th Apr 2012 16:22

VAT on exports

I once worked for a manufacturing company who exported most of its products. We were always paid by by HMRC for input tax refunded. The only downside was that we were audited nearly every year by the "VAT man"

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By KWallis
20th Apr 2012 16:55


Hi Paul


Thanks for that, I think an audit by the man is probably a small price to pay for getting money for nothing!!



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