Claiming VAT on purchases made before registration

Claiming VAT on purchases made before registration

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Good afternoon.

A client would like to voluntary register for VAT has asked whether he could reclaim the VAT on a van he purchased 2 years ago. He still uses the vehicle for running his business.

However, the full cost of the vehicle has already been claimed as capital allowance in the previous tax return. If he claims the VAT back, will I need to amend the 2011/12 tax return as well?

Thanks in advance for your help!

Replies (3)

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By Peter613
24th May 2013 11:52

Add to income
I assume you claimed 100% aia relief why not just add it to income

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By David Massey
24th May 2013 13:03

Section 238(2) CAA2001

The VAT reclaimed needs to be taken to the capital allowances pool as though it were disposal proceeds received for the van.

You do this for the period in which the VAT is reclaimed, so you don't need to worry about adjusting any earlier years.

In practice, this way well give you a result identical to the treatment suggested above by seitler.

David

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By la.manu
24th May 2013 13:31

Thanks David Massey and seitler, I will account it as capital disposal and advise my client on proceeding with VAT registration.

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