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  • Writer's pictureRhys Evans

Can I Reclaim VAT on Purchases before being VAT Registered?

Not all businesses will need to register for VAT when they first start trading, and end up needing, or choosing to register after you have been trading for some time.


Businesses will need to register for VAT when they reach the VAT Registration threshold, which is currently £90,000.


While you are not registered for VAT, you will be paying VAT on the products and services you purchase, some of which may be able to be reclaimed when you register at a later date.


Once you have registered for VAT there is a time limit on how far back you can go back and claim VAT on purchases for.


This time limit differs depending on the goods or services.


Reclaiming VAT on Goods

If you are claiming VAT on Goods purchases, you may be able to go back as far as 4 years before registration.


To be able to claim the VAT on goods purchased before registering the goods need to still be owned, used or in stock.

 

For example, you bought power tools 3 years ago, for £1,000+VAT, before you were registered for VAT.

As long as these tools are still in the business, and you have the original receipt, you can reclaim the £200 VAT once you are registered.


Reclaiming VAT on Services

The time limit to reclaim VAT on services purchased before VAT registration in 6 months.

In order to reclaim the VAT, the services need to be related to the business, and you have original receipts.


How to Claim your VAT

To reclaim the VAT on pre-registration purchases you will need to prove the cost and date of purchases that are being reclaimed.

You will also need to evidence that these purchase are still relevant at the time of registering.


In order to do this, you will need to provide -

  • Original invoices and receipts

  • A description of the goods or services

  • Dates of purchase

  • Declaration that these are still relevant



You will need to provide all the information above, for each transaction you want to claim the VAT back on, to be included in the first VAT return you submit.

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