claiming back VAT

Posted on: Wed, 17/09/2008 - 13:09
claiming back VAT

Just about to start trading as 'Sole Trader'. I am buying a second hand van. The price is plus VAT. The salesman tells me I can get the VAT back with startup costs. I will not be VAT registered, so how exactly woud this happen?


Posted on: Wed, 15/10/2008 - 17:06 #1
If you're not VAT registered it's no go

Hi Mike,

You can't claim back VAT on things you buy (we accountants call that "input VAT") unless you're registered for VAT.

You could register for VAT and claim back the VAT on your van and certain other costs, but that would also mean you had to charge VAT to your customers.

If you're a B2B business then that'd be no problem, because your customers will mostly be VAT-registered themselves so could claim back the VAT you charge them. But if you're a B2C then your customers will not be VAT-registered, and so you registering in that case would translate as your prices being 17.5% higher as far as your customers are concerned.

Hope that helps.

Cheers

M

Emily Coltman MA ACA
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