Where the trader is exempt or where he or she is not a taxable person (because his taxable turnover does not exceed the specified limit ( BIM31515) and he or she has not opted to register), there is no VAT account. He or she does not have to account for VAT on his sales etc and the burden of any VAT on his purchases and on other supplies to him or her of goods and services for the purposes of his business (including capital items) rests with him or her and cannot be relieved. Accordingly the VAT in the goods and services supplied to is for IT etc purposes an element of the price paid by him. His purchases figure deductible in his Case I computation also is inclusive of the irrecoverable VAT and the capital expenditure on any assets ranking for capital allowances is inclusive of the irrecoverable VAT. Any VAT borne on capital expenditure which does not rank for capital allowances is an ingredient of that capital expenditure and is not deductible in the Case I computation.
