No evidence

Input tax claim on purchase invoices

HMRC disallowed input tax claimed by the taxpayer on its April 2015 return on the basis that the invoices were more than six months overdue for payment. The taxpayer appealed saying it had paid for the invoices by cash and highlighted withdrawals in its bank statements in support.

The First-tier Tribunal decided that on the balance of probabilities the taxpayer had not made the payment. The company had provided no evidence such as a receipt or correspondence from suppliers confirming payment had been made. The amounts for cash withdrawals did not reconcile with any particular invoices.

The taxpayer’s appeal was dismissed. The tribunal also confirmed a suspended penalty issued by HMRC for careless behaviour.

Neil Warren independent VAT consultant said: ‘It is important to recognise that the key date when a business needs to repay input tax...