Reclaim VAT on business purchases?

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As I understand it, if one is VAT registered he passes the output VAT to the taxman from his sales, and reclaims the input tax from purchases.

What happens if he decides to buy some retail goods that will never generate output tax as he has not 'yet' sold them on (but actually never will) as he intends to keep them for his business or personal use?

Can he reclaim VAT back on these purchases? Or in other words, use the input VAT from these items to increase his overall input VAT quota to reduce or even reverse his VAT bill (if said input tax becomes higher than output tax.)

 

[DFL Accountants Ltd]

Hi

Yes - you can recover any input VAT on anything you purchase for the business - even if it is not re-sold - eg. - if you rent a premises and the landlord charges you input vat on the rent then you can recover that input vat through your tax return.

You cannot claim the input vat on anything you purchase for personal use.

Hope this helps

Kind regards