VAT – Pre-registration expenditure

VAT – Pre-registration expenditure

I’m now registered for VAT…..Can I claim VAT on any expenditure pre-registration?

VAT incurred on pre-VAT registration expenditure can be recovered if the following conditions are met:

  • in the case of VAT incurred on goods (either stock for resale or fixed assets), the goods must have been obtained within four years before registration and the goods must still be on hand at the date of registration, either in their original state or incorporated into other goods; and
  • in the case of VAT incurred on services, the services must have been obtained within six months before the registration date and not disposed of before registration.

As with all claims for repayment of VAT the trader must hold the necessary evidence (e.g VAT invoice for the purchase).

The amount of tax that can be recovered is the amount that would have been deductible had the business been registered at the time the tax was incurred.

Can I claim VAT on costs before my company existed?

A company can reclaim input tax on supplies obtained on its behalf prior to its incorporation subject to meeting the following additional conditions:

  • the supplies must have been obtained for the benefit of the company or in connection with its incorporation;
  • the person who obtained the supply must have become a member, officer or employee of the company, and must not have been a taxable person at the time of the supply or importation;
  • the company must have reimbursed the person who acquired the supplies, or given an undertaking to do so; and
  • the goods or services must have been obtained for the purposes of a business to be carried on by the company, and must not have been used (even temporarily) for any other purpose.

Do you need to discuss your expenses in more detail? Or would you rather we just handle the VAT returns for you? Please get in touch.