VAT input tax claims must be supported by proper records, invoices and evidence. During a compliance check, HMRC may review purchase records, VAT invoices, bank payments, business-use evidence and other supporting documentation to verify that VAT has been recovered correctly.
The HMRC VAT Input Tax Toolkit highlights common risk areas, explains the records businesses should retain and provides a practical checklist to help identify potential issues before submitting a VAT Return or responding to an HMRC enquiry.
What is Input Tax
Input tax is the VAT a business pays on eligible purchases, expenses and costs incurred for business purposes. Subject to the relevant VAT rules, businesses may be able to recover this VAT through their VAT Returns. Understanding what qualifies as input tax is an important part of maintaining accurate VAT records.
VAT Invoices
Businesses should retain valid VAT invoices to support input tax recovery claims. In most cases, a VAT invoice provides the primary evidence that VAT has been charged and may be reclaimed where the relevant conditions are met. Incomplete or missing invoices may result in HMRC challenging input tax claims during a compliance check or repayment review.
When Input Tax Can Be Reclaimed
Input tax can generally be reclaimed where purchases are made for business purposes and the relevant VAT conditions have been satisfied. Certain restrictions and exceptions may apply, so businesses should ensure they understand the rules that relate to their particular circumstances and transactions.
Evidence Required to Support Input Tax
Businesses should retain appropriate evidence to support any input tax claimed. This will normally include VAT invoices, receipts and other documents showing the supplier, the goods or services provided and the VAT charged. Without adequate evidence, HMRC may challenge input tax recovery claims.
Common Input Tax Errors
Common errors include claiming VAT without valid supporting evidence, reclaiming VAT on non-business expenses or incorrectly treating purchases for VAT purposes. Maintaining accurate records and reviewing transactions carefully can help reduce the risk of mistakes.
Record Keeping for Input Tax
Good record keeping helps businesses demonstrate that input tax claims are accurate and properly supported. Records should be organised, accessible and retained for the required period so they can be provided if HMRC requests evidence during a compliance check.
Input Tax During HMRC Checks
Input tax claims are often reviewed during VAT compliance checks and repayment enquiries. HMRC may request invoices, explanations and supporting documentation to verify that VAT has been reclaimed correctly. Businesses that maintain clear records are generally better placed to respond efficiently to these requests.
Last Reviewed: June 2026