Input VAT
Input VAT is VAT incurred on business purchases and expenses. A VAT-registered person can generally deduct allowable input VAT against output VAT, subject to evidence, business use, blocked-input and other restrictions. Recovery is not automatic for all expenditure, and exempt activities can affect eligibility. Apply the relevant exam period and scheme.
Worked example
A registered business has output VAT of 800 and eligible input VAT of 300. With no other adjustments, it owes 500 on the return.
Common mistake
Assuming every VAT amount on a purchase is recoverable regardless of business use or statutory restrictions.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | TX (UK) | Supporting | June 2026–June 2027 |