What can VAT be claimed back on?

[monkey_tennis]

Just trying to get my head around something. Assuming we voluntarily register for VAT:

.We can claim back the VAT we make on any purchases? This will include our photography equipment etc, but not expenses such as travel and stationary?

.We only deal with other businesses, so they will claim back the VAT that we charge them for out photography services, if they too are registered?

Is this true?

Also, how does the Govt benefit if everyone is just claiming VAT back from eachother?

Thanks.

 

[Maslins]

You're basically right, though you can claim back VAT on pretty much everything (exlusions include cars, and client entertaining). So you can reclaim VAT on not only photography equipment, but also stationery/travelling where VAT is charged (things like postage stamps & train tickets don't have VAT on them).

VAT is only really a tax on the final consumer, as they won't be VAT registered and can't reclaim it.