Businesses that make taxable supplies are entitled to recover VAT incurred on expenditure (referred to below as 'input VAT') used for the purpose of making these taxable supplies other than those items that are specifically blocked (see below).
Businesses that make only exempt supplies cannot recover input VAT. Businesses that make both taxable and exempt supplies can partly recover input VAT (explained further in 5.39) other than those items that are specifically blocked.
VAT incurred on the following items of expenditure is specifically blocked and
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