VAT register

[EMA747]

Hi. I am looking for some advice about registering for VAT so I can claim it back for business startup costs.

My business will be photography and video (DVD) production with I expect a small turnover in the first few years. At present I have not registered anything with HMRC. I will register the business name etc soon but I also want to try and claim VAT back on some expensive equipment. Let me explain;

I have in the least year and half already purchased around £7500 inc VAT of equipment (video cameras) for my business. I now wish to purchase photographic equipment that would total around £6-7000. I read that if I voluntarily register for VAT then I can claim back all VAT on purchases in the last 4 years. Out of the nearly £15000 of equipment that would represent quite a large amount of VAT back. Something in the region of £3000 I think.

To do this do I just need to register my business name and details, then fill out a voluntary VAT registration form?

One question I had was assume that 12 months or so down the line my business hasn't really made any money will HMRC ask for the VAT back? I would hope it never came to that point but I think it's worth knowing all the risks first.

 

[Zara Accountancy]

By voluntarily registering for VAT you can reclaim the VAT for the portion of the equipment that you use for business purposes.

However, you will also need to charge VAT on all your income generating work which could make you less competitive or reduce your margins.

Also if you subsequently sell the equipment then the VAT on the sale price will need to be repaid.

 

[Biffwilcox]

Hello Both,

On a related matter, I am about to raise my first invoice (for work from November to February). I am not yet registered for VAT. I intend to register and to use a flat rate scheme to recover inputs.

The question is this, if I register now, can I charge VAT on the supplies that took place between 1/11/2011 and 29/2/1012 (given that I have not yet raised the bill)? As I intend to register on a flat rate, I think the advantages of charging VAT on this invoice are obvious but I want to be sure this is allowed before I do it.

Does anyone know the answer to that?

Thanks in advance.

 

[David Griffiths]

You can register voluntarily at any time, and speficy the date from which you want to be registered, so you can backdate registration to 1 November 2011 if you wish.

What you must not do is issue an invoice showing VAT until the VAT registration certificate has been issued.

You will also need to clear this with your customers. If you didn't tell them that you would be charging VAT when you quoted the price, then you have no right to increase the price to include VAT now. If they are VAT registered, they might not mind, but you should still clear it with them.