claiming back VAT....

[monkey_tennis]

We are about to make a business purchase from the USA.

Can we claim the import VAT back? If so, when?

It will be our first business expense, so we are a tad confused!

Many thanks.

 

[Christiane]

You can only claim back VAT if you are VAT registered.

 

[monkey_tennis]

Should we register then? We are well under the threshold - but it may be worth it.

Does that mean we need to start charging our clients vat also?

 

[Christiane]

Only register if you think you will benefit. If you're just starting off, keep your accounts easy and register when you reach the threshold. Saying that if your business is B2B, then you would benefit indeed.
You can only charge VAT to your customers when you have your number.

 

[monkey_tennis]

We are b2b (PR) and the import VAT bill will be around 400 UKP. Is it worth registering just to be able to claim this back?

 

[Christiane]

The general rule is that volontary reg for VAT is worth it for B2B. However bearing in mind that it can take 1 to 2 months to get a VAT number, work out whether you will start selling before you get your number, as you cannot charge VAT without a number.
I am no expert so you might want a chat with an accountant...

 

[Leo-InstallingIT]

Hi

You will have to weigh up the pros/cons. Purely based on the 400GBP, I wouldn't of thought it would be worth it. But if you are selling mainly to businesses that are VAT registered then they will be able to claim any VAT that you put on the products.

It really does depend on the way the product is made up, if the main part of the product price is built up of your labour it probably isn't very beneficial to register. However if you are just marking up an existing product it may benefit you/your customers.

It really is a number crunching exercise. You may find it helpful to get an accountant to help make the decision with you.

I hope this helps
Many Thanks

Leo