1st vat return

JoBo Registered Posts: 16 New contributor 🐸
When completing the 1st tax return HRMC allow you to reclaim vat on items previously purchased up to 3yrs before becoming vat registered.

I have read all about this on the HRMC website but im wondering how much in practice how much you can actually reclaim without raising suspicion?

The situation is, sole trader been trading for about 3yrs prior to becoming vat registered, so has lots of equipment and stock purchased within the last 3yrs (have records to prove) that is still owned. If all of this goes thro then the vat payment is going to be hardly anything. According to the web site (notice 700) this is ok, but is it and has anyone experience of this they can share with me?


  • Poodle
    Poodle Registered Posts: 711 Epic contributor 🐘
    Hi JoBo

    If you have VAT receipts to support the payments then make the claim.

    Be careful with stock, you should have a stock take list of items held for resale as at the date of registration and support this with purhase invoices.

    Processing a first VAT return can result in quite a large sum of input VAT being repaid. I have had situations where the return has just gone through ok with n questions also where HR&C have questioned the amount in box 7 where the percentage against box 4 does not add up but this is usually cleared up over the phone. I have also had experience where HMR&C would not release a repayment until they made an inspection. When a repayment is due I always warn a client that this might happen.

    As long as you have supporting invoices then do not worry.

    Oh and don't forget to claim back any VAT paid on services received not more than 6 months before the date of registration


  • JoBo
    JoBo Registered Posts: 16 New contributor 🐸
    Fab, thanks Poodle.
    PAMDILL Registered Posts: 721 Epic contributor 🐘
    I have done 1st VAT returns quite a few tiems for brand new companies where thee has been a lot of plant and machinery bought in the first month or two of trading. These have all then been repayment returns. 99% of the time it takes a while to work its way through the system and I have had to call them and fax through copies of the purchase invoices for the machinery.

    If your first VAT return ends up being a repayment call your local office about 2 weeks after submititng it if you have not heard anything.
  • Lina
    Lina Registered Posts: 41 Regular contributor ⭐
    Do not forget that all the purchases he made in three years were shown on self assesment tax return. I mean that all expenses were shown inclusive vat. For exmaple he bought smth for 1000+175 vat=1175, so in expenses on the return he showed 1175. If you claim now 175 back, that means that returns for previous years need to be adjusted as the expense is only 1000, but not 1175.I had a similar case and i spend enormous amount of time.
    I hope it does make sence.
    :thumbup1:good luck
  • Gem7321
    Gem7321 Registered Posts: 1,438 Beyond epic contributor 🧙‍♂️
    I've dealt with a few first VAT returns at work but I never knew that you have to submit repaired tax returns. What a nightmare!
  • deanshepherd
    deanshepherd Registered Posts: 1,809 Beyond epic contributor 🧙‍♂️
    I wouldn't go back and amend three year old sets of accounts and tax returns that were perfectly correct at the time of filing. I would make the adjustments in the current year.
  • Bluewednesday
    Bluewednesday Registered Posts: 1,624 Beyond epic contributor 🧙‍♂️
    I have never gone back and amended either, a lot of the time it's not even material.
  • JoBo
    JoBo Registered Posts: 16 New contributor 🐸
    Oh heck, nothings straight forward is it.

    Iv done the vat return now and quite like deans method so will make sure the accountant has all relevent info when completing this years tax return.

    Thanks for all your advice. :thumbup1:
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