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Input VAT regularly exceeding output VAT

Input VAT regularly exceeding output VAT

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I have a new client about to set up who will import goods from China and sell on to customers only in the USA. As I understand it all their sales will be zero-rated and they will have input VAT from their imports and other UK costs that they will be able to reclaim. When registering for VAT we'll therefore need to tick the box stating that input VAT will regularly exceed output VAT. Can anyone advise what the consequences of this will be?

Many thanks

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By The Dullard
25th Feb 2020 14:26

The effect of ticking that box is that you'll then be offered the option of making monthly VAT Returns. That's the consequence of ticking that box.

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By whatdoyoumeanwashe
25th Feb 2020 14:37

Many thanks. That's it? It doesn't open one up to months of questioning by HMRC before they'll process the registration, or more frequent investigations?

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Replying to whatdoyoumeanwashe:
paddle steamer
By DJKL
25th Feb 2020 14:47

Depends what you are buying and selling I suspect- computer chips might whet their appetite.

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chips_at_mattersey
By Les Howard
25th Feb 2020 18:26

Make sure the client has proper export evidence, to ensure HMRC make those regular repayments.

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By Matrix
25th Feb 2020 19:06

HMRC usually enquire into the first repayment return so make sure you have your ducks in order.

Had one last week.

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Replying to Matrix:
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By whatdoyoumeanwashe
25th Feb 2020 19:36

Yes, I've had one of those but I think it was the combination of repayment and construction industry that got them interested.

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