ABSTRACT
Value Added Tax (VAT) is a tax on the consumption of goods and services. As a VAT registered person, the taxpayer is entitled to reclaim from HM Revenue & Customs, commonly referred to as input VAT, the VAT incurred on their purchases and expenses directly related to its business activities in respect of standard-rated, reduced-rated and zero-rated supplies. In some cases, VAT on land, buildings and certain construction services, purchased for both business and non-business use, could be recovered in full by applying what is known as ‘Lennartz’ accounting, to reclaim VAT relating to the non-business use and account for VAT on the non-business use over a maximum period of 10 years. Private individuals who decide to construct their own home are able to reclaim VAT they pay on goods they use to construct their home by use of a special refund mechanism made by way of an application to HM Revenue & Customs.
