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Written question asked by Maya Ellis (Labour) on Tuesday, 14 July 2026, in the House of Commons. It was due for an answer on Thursday, 16 July 2026. It was answered by Dan Tomlinson (Labour) on Thursday, 16 July 2026 on behalf of the Treasury.

Construction: VAT

Question

To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of delays in HMRC VAT registration processing on construction businesses; and if she will consider changes to the VAT registration rules to allow businesses to recover input VAT on materials purchased for taxable supplies where HMRC processing delays result in those materials being used before a VAT registration application has been processed.

Answer

Businesses can only recover input VAT once they are VAT registered. However, once registered, they may recover VAT on goods purchased up to four years before that date.

HMRC processes the vast majority of VAT registration applications promptly, with 95% currently processed within the service standard of 40 working days. The Government has no plans to change the VAT registration rules in this area.

Secondary information

Type
Written question
Reference
18881
Session
2026-27
Subjects
Construction Registration VAT
Link
View this Written question on www.parliament.uk