Pre-VAT registration expenditure

Pre-VAT registration expenditure

Didn't find your answer?

My client has just had to register for VAT.

About 12 months ago they leased some equipment for use in the business on a four year lease.

Can VAT be re-claimed on all the previous 12 monthly payments to the leasing company, or are they limited to 6 months only?

Thanks for replies.

Replies (1)

Please login or register to join the discussion.

avatar
By DMGbus
07th Jun 2012 08:53

Leasing = a service so 6 months limit

The differentiation between goods and services is important here.

In my opinion the supply by the finance company is a service - hire of equipment (like rent of premises).

Therefore a service, therefore 6 months limit to pre-registration input tax claim in this case.

Would be different if it were a case of no VAT charged on instalments and all VAT charged at outset of agreement which indicates the supply of goods on finance (where 4 year time limit would apply).

 

 

Thanks (0)