VAT: No Invoice No Claim

This is why we moan so much!

I know you feel like we moan too much about having the correct tax invoices and support but this recent case will help let you see why we do it.

After a lengthy case the court of appeal held that Tower Bridge GP were not able to claim any of the input vat they had as they did not hold relevant tax invoices, the link to the court filed document is here: HMRC V TOWERGATE

The case heard that the client Stravex invoices were not valid for a few reasons, namely they did not have a valid vat number on the invoice nor were they addressed to the company claiming the input vat. It turned out the Stravex invoices was not a legitimate company registered with or submitting any taxes to HMRC.

Towergate appealed HMRC's initial decision on the basis that they did have some support information although it may not have covered all the points HMRC required for a valid vat invoice but they did have invoices.

The court of appeal found in favour of HMRC and found that Towergate had failed to carry out the basic requirements of getting support required from their supplier, so the appeal was dismissed and Towergate were made to pay an eye watering amount of vat.

This of course is a high profile case but does happen all the time to companies who do not follow the guidelines set out to them. It is our job to make sure you keep to these guidelines and you have all the required support documents you require.

If possible, always obtain a proper tax invoice from a supplier and don’t lose it! The level of evidence required when no invoice is held usually depends on the value of the claim. There would be a difference between persuading an inspector that £20 input tax on stationery is recoverable and the claiming of £200,000 VAT on a property purchase is permissible. As always in VAT, if you get it wrong and claim VAT without the appropriate evidence there is likely to be a penalty to pay.