Taxable supplies to reclaim on first VAT Return

System

Can anyone out there advise me on what can and cannot be reclaimed on the first return for a limited co, builder. Effective date of registration 1 Sept 07

Any help gratefully accepted.

System

Re:Taxable supplies to reclaim on first VAT Return

You may find this link helpful

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_FAQs&propertyType=document&columns=1&id=HMCE_PROD_008650

System

Re:Taxable supplies to reclaim on first VAT Return

In a nutshell you can reclaim VAT on things that you physically held at the date of registration including stock etc - I would strongly recommend that someone does a stock take of exactly what was held at that date, in case an inspector tries to discredit your figures at a later date.

Claudia

System

Re:Taxable supplies to reclaim on first VAT Return

The basic rules are that you can reclaim the input VAT on goods you have purchased in the three years prior to registering for VAT, provided you still have them on hand at the time of registration. You can also recover the VAT on services incurred up to six months prior to registering for VAT, provided you have not supplied them on or they have not been applied to goods that you have sold (e.g. processing services). In both cases, you have to retain the original purchase invoice as proof of entitlement to deduct input tax. The legislation is contained within Regulation 111 of SI 1995/2518, and clearly states the limited number of exceptions to these basic rules.

The sort of costs you are likely to incur before registration are legal and accountancy costs, purchase of machinery, capital items, and stock. In all, a considerable amount of VAT can be incurred before a business starts to trade.

A corporate body can recover VAT incurred before incorporation on its first VAT return, provided the person to whom the supply was made, or who paid for the supply, became a member (shareholder), officer, or employee of the corporate body, and was reimbursed for the whole cost of the goods or services. They must also have been acquired for the purposes of the business.

You are supposed to claim back any pre-registration VAT on your first VAT return. However, HM Customs & Excise may allow the claim to be made on a later return, up to three years after the date the first return was due. You could, therefore, reclaim the VAT on costs up to six years after they were incurred.

Regards

Dean

System

Re:Taxable supplies to reclaim on first VAT Return

Hi all

Thanks very much for all the information given, very clear and concise, far better I'm sure that speaking to the VAT people themselves. Once again, thanks very much.