Reclaimin VAT on purchases if sales are zero rated

Reclaiming VAT on purchases when most sales are zero rated

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98% of my client's business sales are zero rated however they have just gone over the VAT threshhold and need to register for VAT.

They are about to but a van for 15,000 plus VAT of 3,000; if they buy the van after registering for VAT I believe they can reclaim the VAT .. is that correct?

Indeed I think they could reclaim the VAT (or most of it) even if they had bought the van within a certain period before registration?

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By tom123
20th Mar 2017 10:53

If your sales are zero rated (eg childrens clothes etc), you claim all the VAT in full as normal - your goods are 'vatable', just at an amount of nil.

Presumably none of your sales are exempt (insurance, medical work) etc.

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By mrme89
20th Mar 2017 10:56

If the sales are mainly zero rated, your client would have been better registering for VAT voluntarily some time ago!

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Replying to mrme89:
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By Accountant A
20th Mar 2017 13:00

mrme89 wrote:

If the sales are mainly zero rated, your client would have been better registering for VAT voluntarily some time ago!

Sounds like the client needs 'an accountant'.

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By anneaccountant
20th Mar 2017 17:36

Many thanks

Only been a client for a week so not had the chance to help before but yes I agree they could have registered earlier.

Sales are mainly books

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