Hi there, I run an ecomerce business and I've recently switched from sole trader to Ltd, whilst simultaneously switching from flat rate vat scheme to standard.
What I cant seem to find out definitively is can I claim the stock I have on hand which was bought whilst being on the frs but isn't yet sold? My accountant seems to think I can't claim this, but that doesn't seem right to me as I'm effectively paying full rate vat on the purchase and then again on the sale.
I've nearly finished a rough stock take and it's quite a high figure, for me anyway, so it could seriously affect my business and effectively cut all my profits if I can't claim.
Amy help would be greatly appreciated
Replies (12)
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The question about stock on hand is answered here: www.gov.uk/government/publications/vat-notice-733-flat-rate-scheme-for-s... see para 12.8.
Assuming you retained the same VAT number when you changed from sole trader to limited I see no problem with claiming the VAT.
(These are questions that you should have asked your Accountant before changing!)
Sell it from sole trade to company could have been the answer.
But not really considered if TOGC applies which might be the reason your accountant says no.
Always best to ask why he says no
Then you could have asked us a question with a better level of detail
You may be better off getting an accountant that charges more, but who asks the correct questions and establishes the facts before giving a knee jerk reaction.
Did you speak to the firm's VAT expert?
Paul Crowley wrote:
You may be better off getting an accountant that charges more, but who asks the correct questions and establishes the facts before giving a knee jerk reaction.
Did you speak to the firm's VAT expert?
You might be right, this is actually the second time I've got misleading advice from them, first time it really affected my business, which is why I'm a bit more vigalent now.
Update though, I talked to hmrc vat helpline, at first they said I can't claim it but when I showed them the section on the hmrc website saying you can and how to do it she apologised for the advice initially given. So she agreed you can in the end but my confidence on hmrc advice is a bit shaken
It's what I would've expected.
HMRC lose VERY regularly at tax tribunals
@OP
Do not rely upon HMRC
Do you now have anything in writing to say you can claim?
The get out clause was in Les' reply
Transfer the VAT number, that way the change to company is ignored and TOGC not a problem
The number transfer was not in the original posting
If planned I would not usually advise keeping the old number
Fix the problem before the change
Any old Vat issues then die
New 'trader' starts with a clean sheet
Transfer then a TOGC