VAT Voluntary Registration

[madameliberty]

Hi All,
I'm a startup e-commerce business. I've been live for around 6 months now, registered as a sole trader selling online in the UK and Europe.
I'm not turning a profit & am under the HMRC VAT threshold however I have just employed a company to do my digital marketing.
Given the amount I've spent so far (buying the business, buying more stock and now paying the fees of the digital marketing company) I'm thinking about registering for VAT voluntarily so that I can claim back the VAT I've spent so far & will spend in the near future.
I know this means I will have to charge VAT on the products I'm selling but given the numbers are quite low I don't see this as too much of a hurdle.
I have read everything on the HMRC website but it doesn't seem to definitely say if I can claim back the VAT I've spent so far.

Any advice would be greatly appreciated!

thanks everyone
Alison

 

[Paul_Rosser]

Someone else asked something similar in this thread -

http://www.ukbusinessforums.co.uk/forums/showthread.php?t=276747

Have a look at the link Scalloway provided as it seems you can provided it's within the correct timeframe.

 

[altwebdesign]

I registered for vat recently.

Thats correct once youve registered you put VAT onto what it is your selling.
Then what you buy you get deducted from what you owe.
You can also register for the flat rate scheme which i think is 13.5% or 14%

Remember, you need to start claiming VAT as soon as you register NOT once it gets approved.

You have 3 month periods and when you first register you may need to backdate VAT to your clients who have already paid - can be tricky or your accountant can work around that.

Thats important to remember, you start charging VAT as soon as you apply for it, not once its approved.

 

[Paul_Rosser]

The flate rate scheme is good, but you can't claim VAT back unless it's on certain capital purchases valued over £2000. You can have multiple items but they have to be all invoiced at the same time.

The percentage rate also depends on what line of business you are in, but if you don't plan on purchasing much stuff then can work out very well. You also get a 1% discount in your first year.

http://www.hmrc.gov.uk/vat/start/schemes/flat-rate.htm

 

[Joyous]

Given the amount I've spent so far (buying the business, buying more stock and now paying the fees of the digital marketing company) I'm thinking about registering for VAT voluntarily so that I can claim back the VAT I've spent so far & will spend in the near future....

...I have read everything on the HMRC website but it doesn't seem to definitely say if I can claim back the VAT I've spent so far.

Any advice would be greatly appreciated!

Hi Alison

The general rule on pre registration VAT is that you can go 4 years to claim back VAT on goods bought for your business provided that the goods were still in your possession as at the date of registration.

So, for example, you can claim back the VAT on any stock that you might have bought but of you've already sold it you can't claim back the VAT on the goods sold.

For services you can go back 6 months. Similar to above if the services are in respect if something that's since been sold then you can't claim back that VAT.

HMRC have some good info on this here.

Regards

Joy