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Introduction

Regulations made under VATA 1994, s 26(1) prescribe a standard method for calculating the amount of input tax provisionally attributed to taxable supplies in any prescribed accounting period¹.

Provisional nature of attribution

The attribution is provisional in the sense that it may later be adjusted in keeping with the regulations:

1. Ìý

   •ÌýÌýÌýÌý by reference to a longer period²

2. Ìý

   •ÌýÌýÌýÌý where an intention to use goods in making taxable and/or exempt supplies is not fulfilled and they are used in making different supplies within six years³, and

3. Ìý

   •ÌýÌýÌýÌý in relation to capital items⁴

An adjustment may also be required where the attribution, on the basis of a single period or longer period, 'differs substantially'⁵ from the actual taxable use. The adjustment is referred to as the 'standard method override'. The override is described in V3.461C.

The regulations are the means of providing for the 'fair and reasonable attribution' required under VATA