2 min read
Definition
Blocked input VAT is VAT that a business cannot reclaim even though it paid it — most notably VAT on business entertainment and, largely, on buying a car available for private use.
In plain terms
Not all the VAT you pay is recoverable. Some categories are specifically blocked, so the VAT becomes a real cost rather than something you claim back on your return.
Why it matters for your company
Knowing which input VAT is blocked stops you wrongly reclaiming it — a common error that triggers HMRC assessments — and lets you budget the true, VAT-inclusive cost of cars and entertaining. It also interacts with partial exemption.
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