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Document updated/added on 14.02.2019

Topic: Dealing with HMRC

Schedule of pre-registration expenditure
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Schedule of pre-registration expenditure

Schedule of pre-registration expenditure

If you trade before you register for VAT, you could claim input tax going back up to four years.

Pre-trading expenditure

It is possible for you to reclaim some of the VAT you incur before you register on the first VAT return (when you eventually do). VAT can be reclaimed on pre-registration purchases of both goods and services, but there are restrictions. VAT can be reclaimed:

  • on goods if the purchase was incurred during the four years prior to registration
  • on services if the purchase was made during the six months prior to registration.

In both instances there is a further condition that the goods or services must not have been fully “consumed” before the registration date. This might prove tricky with services, for example rent, which apply to specific periods. Stock items that have been sold will also be excluded.

Keeping track

If you know, or think, you will be registering for VAT at any time in the future, use the document to record your expenditure along with the invoice details. This will allow you to easily identify what you can claim when you do register, as you will be able to see exactly where the historic cut-off date will be. It will save you time, and if you are using an accountant possibly professional fees.

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