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icon1.png Vat

ive started a new company and investing in equipment to hire out, my question is, im vat reg and im spending a lot on vat in buying the goods and renting them out, so the vat income is far less than my outgoing vat amounts,,, can I claim back the vat? if so for how long? many thanks

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  • 1 month later...

To be VAT registered you are supposed to have an Annual turnover above a certain Threshold, being VAT registered you can claim back some of the VAT by filling in a VAT return form, as by your post you do not yet know how to do this, then you need someone who does to help you, such as an Accountant.

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The current VAT threshold is £79,000 if you are unlikely to exceed this amount then its not worthwhile registering for VAT. Its voluntary if your turnover is below this amount - when I first set up my company I was registered for VAT. After spending time doing my VAT returns every month my accountant suggest I pay my VAT with one of the "flat rate schemes" this actually means that you do not pay the full amount of VAT but instead pay a percentage based on the industry sector you are working in. You generally pay a lower rate but cannot claim VAT on large purchases.

 

 

Then one day I had a VAT inspection/audit and the VAT inspector after going through all my accounts suggested that I did not need to register for VAT and suggested that I de-register as it would actually save me money to do so.

 

 

 

And yes you can get a refund of VAT if you pay out more VAT than you claim back form your customers!

 

So I followed the VAT inspector's advice and de-registered, and I have never re-registered. Its so much easier to run a business without bother with VAT returns every 3 months.

Edited by topcat1802
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I agree with you topcat, i was VAT registered untill last year when i de registered and find it one less hassle, a lot better for a small company.

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  • 3 weeks later...
To be VAT registered you are supposed to have an Annual turnover above a certain Threshold, being VAT registered you can claim back some of the VAT by filling in a VAT return form, as by your post you do not yet know how to do this, then you need someone who does to help you, such as an Accountant.

 

You are Wrong !!!

There is no lower income/turnover threshold before you can be VAT registered !! any self-employed person or business can register for VAT no matter what their income or turnover. The thresholds are the point at which you Must be VAT registered.

Whether it is worthwhile or not is a different matter, but for a business that is buying a large numbers of equipment that has VAT included in it's price then it could well be in it's best interest to be VAT registered.

If the OP were to register on line he would be entitled to post his VAT returns on a quarterly basis; and to answer his specific question, Yes you can claim back the VAT. However, because his business is "renting out" this equipment I am not sure if he can claim the VAT back all in one go or if it has to be done on a depreciating basis.

As Blueda has put at the end of their post it may be a good idea for you to approach an Accountant, either that or you will need to have a very good read of the VAT regulations to discover the ins and outs that are appropriate to you or your business.

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