19-015 Recipient of supply (tripartite transactions)
The ‘to whom’ test
There is a myth that input tax can be claimed only by the person who pays for the supply. However, a key word in VAT is ‘supply’, rather than ‘payment’.
Generally, VAT on a supply is only reclaimable if it was charged on a supply to the claimant and not to another person (VATA 1994, s. 24(1)).
It may be thought that it is easy to determine who received a supply of services. Although the recipient of a supply is usually either the person with whom the supplier contracted or the person that pays for the service, this is not always true.