Timing of claim

Your business can only claim input tax on a VAT return when it has received sufficient evidence to support a claim, i.e. a tax invoice has been issued by your supplier. If there has been no invoice issued or received, then input tax claims should be delayed until they are received.

Many invoices will be sent by email, and some subscribers have commented that invoices can sometimes end up in a spam folder which only comes to light when a supplier chases non-payment. In such cases, you cannot claim input tax until the invoice has been taken out of the folder and processed into your accounting system. The input tax delay is not a VAT error, it’s a timing delay.

In the absence of a tax invoice, you can claim input tax if you hold alternative evidence to show that you have paid VAT to a registered supplier for a business expense that relates to your taxable sales, e.g. correspondence, purchase orders, proof of payment, etc.

Internal delays?

For many businesses, invoices are logged when received but not processed into the accounting system until they have been approved by directors, senior managers or budget holders. If this applies to your business, then your input tax claim might be delayed by one quarter if, e.g. your managers or budget holders are on holiday or sick leave, or just very busy.

HMRC’s updated guidance says that you should always claim input tax in the “proper period”, i.e. when the invoice has been received, but accepts this might not always be practical due to particular circumstances.

Due diligence checks. These are applied to ensure that your supplies have charged you for the correct goods and services and at the agreed price. These checks can take time.

Internal accounting procedures and governance. HMRC accepts that some businesses have a cut-off date for processing invoices, e.g. 20^th of the last month in the tax period. Invoices approved on 21^st and later would not be processed and therefore input tax will be claimed later.

In both of these situations, HMRC accepts that late input tax claims are acceptable, i.e. no error has taken place.

If your business is partially exempt, you must ensure that your input tax claim is based on the calculations for the period when tax became chargeable.

Example. Avitar Financial Services processed the office telephone bill for December 2025 on 21 January 2026 because of due diligence checks and other accounting procedures. The business is partially exempt and had a recovery percentage of 34% on business overheads with its partial exemption calculations in the December 2025 VAT quarter and 28% in March 2026. The business is correct to claim input tax in March 2026 but must use 34% rather than 28%.

Quarterly variations will be resolved with the annual adjustment calculation, which is compulsory for all partially exempt traders.

If the invoice(s) overlap the annual period, it is even more important to apply the correct percentage.