A client company of mine has recently registered for VAT having been under the VAT limit for many years; during this time the company invested heavily in plant & machinery benefiting from the Annual Investment Allowance.
The company wishes to make a retrospective claim for the VAT paid prior to registration on plant & machinery still used by the business.
Does this mean that an adjustment will need to be made in the next set of company accounts to the cost/depreciation of plant and machinery, and also a claw back of the AIA for items claimed gross now adjusted to net?
I would be grateful to hear from anyone who has encountered a similar case.
Thank you.
Related resources
Replies (1)
Please login or register to join the discussion.
VAT reclaim = proceeds for CAs
In the cases that I have dealt with I have treated the VAT reclaim as a reduction in the cost of fixed assets in the accounts and proceeds against the capital allowances pool in the year that the VAT has been reclaimed.