quick VAT question

[dcw@pr]

If you buy something when you are not VAT registered, then become registered at a later date, am I right in thinking you can claim back the VAT on your earlier purchases, assuming they are still in use (hardware)? Is there a time limiton this, i.e. do you have to VAT register within 3 months or something like that?

[Eric Mc]

Yes, you can claim back the Input VAT on the original item if you become VAT registered later. There are a number of criteria that have to be met:

Retain the original VAT invoice. You may need to ask the supplier for a correct VAT compliant invoice at the date of purchase. Going back and getting one later may be a problem.

The item must still be in use by the business at the time it registers for VAT or, if a resale item, should still be in stock at the time the business registers for VAT.

There are no specific time limits. If you still have the item at the time the business VAT registers, then you can claim back the Input VAT.
Don't forget, that once you are registered, when you sell any item (whether a fixed asset or a stock item) on which Input VAT was originally claimed, you must charge VAT on the sale price of the item to your customer.

>> Edited by Eric Mc on Friday 25th February 12:51

[dcw@pr]

Thank you, that's what I was hoping the answer would be

[cirks]

in the same way, if you are accepted onto the FRS VAT (effective from VAT registration date) then are input VAT amounts claimable for purchases prior to registration or do these earlier purchases still come under the FRS?

[Eric Mc]

I honestly wouldn't know about this as the FRS (Fixed Rate Scheme) is relatively new. I would hazard a guess that one of the penalties you pay for entering into the FRS is the inability to claim back any "actual" Input VAT - even if it was pre-registration.

Can't have it both ways!

[cirks]

Eric Mc said:

Can't have it both ways!

not even with a great accountant like you?