General VAT Query

[taxing]

So I have setup a limited company but have not registered for VAT as the company is not trading yet and unsure if my business will reach the VAT threshold anytime soon.
I'm aware that I will not be able to charge VAT for goods for obvious reasons, but my question is:

When I'm purchasing goods from my wholesale suppliers, will they be charging me VAT considering my business is not VAT registered?

If they do Charge me VAT will I be able to claim this back from HMRC?

Novice question I know but something I want to be clear on

Thank you

 

[japancool]

When I'm purchasing goods from my wholesale suppliers, will they be charging me VAT considering my business is not VAT registered?

Yes.

If they do Charge me VAT will I be able to claim this back from HMRC?

No.

 

[KM-Tiger]

What is the nature of your business?

If your customers are mainly VAT registered businesses then there is likely a financial advantage to being VAT registered as you will be able to reclaim input VAT, and it won't matter to your customers if you charge VAT.

You can register voluntarily even if you are below the threshold.

 

[Newchodge]

So I have setup a limited company but have not registered for VAT as the company is not trading yet and unsure if my business will reach the VAT threshold anytime soon.
I'm aware that I will not be able to charge VAT for goods for obvious reasons, but my question is:

When I'm purchasing goods from my wholesale suppliers, will they be charging me VAT considering my business is not VAT registered?

If they do Charge me VAT will I be able to claim this back from HMRC?

Novice question I know but something I want to be clear on

Thank you

A business that is VAT registered MUST apply VAT to everything sold.

A business that is not VAT registered cannot apply VAT to anything sold.

Only a business that is VAT regostered can claim back VAT paid from HMRC.

 

[taxing]

Thank you, that cleared up that question I think it will be benefical if I do voluntarily charge VAT on goods sold. I'll be running an online business which targets the construction industry by selling essential supplies to a construction project.

 

[Newchodge]

Thank you, that cleared up that question I think it will be benefical if I do voluntarily charge VAT on goods sold. I'll be running an online business which targets the construction industry by selling essential supplies to a construction project.

You cannot voluntarily charge VAT. You voluntarily register for VAT.

 

[taxing]

You cannot voluntarily charge VAT. You voluntarily register for VAT.

I meant voluntairly register for VAT. ?

 

[Mark T Jones]

I meant voluntairly register for VAT. ?

This is almost certainly the best approach, not least because some potential customers and suppliers that can't accommodate you not being registered.

 

[macScot]

Make sure you read up on this

Check when you must use the VAT domestic reverse charge for building and construction services

Find out about the reverse charge for supplies of services reported within the Construction Industry Scheme (CIS).

www.gov.uk

Also note:

Purchases before registration​

You can reclaim VAT paid on goods or services bought before you registered for VAT if you bought them within:

• 4 years for goods you still have or goods that were used to make other goods you still have
• 6 months for services

You can only reclaim VAT on purchases for the business now registered for VAT. They must relate to your ‘business purpose’. This means they must relate to VAT taxable goods or services that you supply.