The House of Lords has announced that the current three year time limit on making claims for input VAT does not apply where the input VAT was incurred prior to 1 May 1997.
 
The decision also leaves open the possibility of it being invalid for subsequent periods as well, though that is less likely.
 
This time limit was introduced in May 1997 but no transitional period under the old rules was given when it was introduced. An earlier European Court of Justice (ECJ) decision had held in the case of over paid output VAT that whilst a time limit on making claims was permissible, a transitional period had to be granted to taxpayers to allow them to exercise their rights.
 
Their Lordships have now confirmed that the principle set out by the ECJ in respect of output VAT applied equally to input VAT.
 
Graham Elliott, VAT partner at haysmacintyre, said "This is a welcome if overdue decision, and some of their Lordships' comments make clear they were far from happy with HMRC's handling of this matter, though it does seem that there are a number of unanswered questions".
 
Phil Salmon, Director of VAT services, said "This gives the green light to reviewing their past input tax claims and making further claims as appropriate. We can advise businesses on where such claims might ?? the strength of their position".
 
For further information please contact:
 
Graham Elliott - gelliott@haysmacintyre.com
Phil Salmon - psalmon@haysmacintyre.com
Andrew Scorgie - Kysen PR - 020 7462 8408
 

about the haysmacintyre VAT team
The firm has a partner, a director and a manager dedicated to advising on all aspects of VAT. They have specialist knowledge of the not for profit/charities sector and also of the real estate sector but advise organisations in all sectors. The team provides a range of review, advisory, transactional support and appeal services. Being at the cutting edge of developments, our experts contribute to a number of media and are regular speakers at internal and external events. Yet they also speak in plain language and provide responsive and pragmatic advice in a commercial context. Graham Elliott, the VAT partner, writes a monthly article for Accountancy and is a regular contributor to other media.