Flat Rate VAT and retrospective purchases

[Ian W Grey]

Hi,

I am looking into becoming VAT registered at the moment especially the flat rate vat as my industry is currently 13% but I am not rushing into it until I decide that it is the best solution for me currently as I do invoice for me than I spend.

Except that this week I need to purchase equipment so that I can complete an upcoming job and I noticed on the VAT page at HRMC that is says the following;

You can generally reclaim VAT on goods you bought up to four years before you registered for VAT, and services you bought up to six months before you registered. Remember too that you may be able to backdate your VAT registration by up to four years although once your date of registration has been agreed with HM Revenue & Customs (HMRC), it cannot normally be changed.
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Does this apply also for flat rate VAT? I am aware that to claim back on purchases on the flat rate VAT scheme you need to spend over £2000 on a single receipt which I will be doing.

Any help with the flat rate vat scheme and retrospective purchases would be greatly appreciated.

All the best,

Ian

 

[David Griffiths]

Yes, the pre-registration rule applies to flat rate VAT

 

[Jeremiah@RHJ Accountants]

As above the answer is yes and make sure you have valid VAT receipts as evidence.

 

[Ian W Grey]

Thank you for the reply guys, helps alot.

Couple of additional questions come to mind;

1) Does it get more complicated if the purchases are outside the UK but within the EU?
2) When you register for VAT can you do straight onto the flat rate tax scheme...if not and you have to wait for a vat period to begin before you can start the flat rate scheme can I claim VAT back on purchases under £2000 or wait til I start the flat rate scheme?

Hope that last question makes sense

 

[Scalloway]

1. The procedure for purchases from the EU is for the customer to supply their VAT number and the supplier to zero rate the sale.

 

[David Griffiths]

Thank you for the reply guys, helps alot.

Couple of additional questions come to mind;

1) Does it get more complicated if the purchases are outside the UK but within the EU?
2) When you register for VAT can you do straight onto the flat rate tax scheme...if not and you have to wait for a vat period to begin before you can start the flat rate scheme can I claim VAT back on purchases under £2000 or wait til I start the flat rate scheme?

Hope that last question makes sense

The rules about recovering VAT pre registration only apply to UK VAT. I'm not aware of any mechanism to recover VAT paid to other EU countries before registration

You can use the flat rate scheme from the date of registration, or you can start off on the normal scheme and change to the FRS from the start of any VAT period. Be aware that there is a reduction of 1% in the relevant flat rate for businesses in their first year of registration, so if you "go normal" you will give up part of this