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Where Taxpayers and Advisers Meet

Reclaiming VAT before registration

Notme
Posts:5
Joined:Sun Feb 16, 2020 6:40 pm
Reclaiming VAT before registration

Postby Notme » Fri Feb 21, 2020 5:55 am

HI all,

We have been running for over a year. We are a manufacturer/supplier, we source materials, make things and sell them on Amazon. I registered for VAT a few weeks ago, and it appears we've blown about 1.5K on VAT which we can potentially reclaim. Our next due date is before 31st march (we pay quarterly). With that said, I have the following questions I'd like answered:

1. How far back can we reclaim VAT ?
2. Can we reclaim all the VAT ? I've heard it's quite complicated.

robbob
Posts:3228
Joined:Wed Aug 06, 2008 4:01 pm

Re: Reclaiming VAT before registration

Postby robbob » Fri Feb 21, 2020 9:29 am

1. How far back can we reclaim VAT ?
It's 4 years for assets (you still had at date of registration) - bought specifically for business purposes.
6 months for services
You can also reclaim vat on stock at date of vat registration - also any items bought for sales billed with vat included.

Note to claim vat you must have paid it - if slightly unsure check the relevant invoice so see you were billed vat.
Normally no vat can be claimed on car purchases - the exception being genuine pool car.


https://www.gov.uk/vat-registration/purchases-made-before-registration
2. Can we reclaim all the VAT ?
yes if item qualifies - however if assets have non buisness use you should restrict vat reclaim on assets to business use element.

I
've heard it's quite complicated.
Not the claiming bit no list items and add to your vat return
- complications probably only arise with any items that are not easily flagged as being allowable or not allowable - eg is rent a service ? gas and electric for premises a service ?

Notme
Posts:5
Joined:Sun Feb 16, 2020 6:40 pm

Re: Reclaiming VAT before registration

Postby Notme » Fri Feb 21, 2020 3:51 pm

Thanks Robbob, very helpful of you.

Do you know of any resources I can read to ascertain what is and isn't a service ? looks like this is a bit of a grey area.

Also, I was thinking about how you could do this if you went MTD. We use Quickbooks so the last year's worth of transactions are lumped together. Either we submit all the transactions from 01/01/2019 in our return statement and then go through an arduous process with HMRC ratifying everything, or we "remove" some transactions by setting them to "No Vat".
We have attached invoices and receipts as attachments to every transaction though, not sure if HMRC will have access to those when we submit our return.


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