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Costs that often result in input tax questions

Input tax questions often arise in relation to the following costs:

1. Ìý

   •ÌýÌýÌýÌý accountancy services

2. Ìý

   •ÌýÌýÌýÌý clothing

3. Ìý

   •ÌýÌýÌýÌý domestic accommodation

4. Ìý

   •ÌýÌýÌýÌý entertainment

5. Ìý

   •ÌýÌýÌýÌý farmhouses

6. Ìý

   •ÌýÌýÌýÌý gifts

7. Ìý

   •ÌýÌýÌýÌý goods imported for private purposes

8. Ìý

   •ÌýÌýÌýÌý holding companies

9. Ìý

   •ÌýÌýÌýÌý legal services

10. Ìý

    •ÌýÌýÌýÌý motor cars

11. Ìý

    •ÌýÌýÌýÌý pension schemes

12. Ìý

    •ÌýÌýÌýÌý radios, televisions and music centres

13. Ìý

    •ÌýÌýÌýÌý recreational activities

14. Ìý

    •ÌýÌýÌýÌý religious buildings

Accountancy services

HMRC policy¹ is that VAT on costs a VAT-registered sole trader or a partnership incurs on accountancy services can normally be treated as input tax without restriction for the element that relates to personal tax services. If, however, an element of the fees are clearly for personal matters, for example, an individual may be charged significant fees for inheritance tax advice, the VAT on that element of the fees should not be treated