Share this content

Pre-registration expenses purchased by director

Can company recover VAT on computer purchased by director before VAT registration?

Didn't find your answer?

Company has been trading for many years. Registered for VAT on 1.11.19.  Director bought laptop for use in business in Sept 2019.  VAT invoice is in director's name (online purchase). Company reimbursed director in Sept 2019.  Can company recover the VAT on computer ?  This is something that must happen all the time but I have failed to find definitive confirmation (or otherwise) that the company can recover the VAT paid by, and reimbursed to, the director.  VAT Notice 700 para 11.2 says that the supply must have been to the registered person.  I can't find anything that overrides this for employee-purchased expenses.  11.4 doesn't apply because it relates to pre-incorporation, rather than pre-registration, purchases by a director.  VAT can be recovered on employee-purchased expenses.  Are the rules for recovering pre-registration VAT more stringent?

Replies (5)

Please login or register to join the discussion.

RLI
By lionofludesch
04th Feb 2020 12:13

I'd claim.

Unlikely to be disallowed at a VAT visit provided the director actually needs it for the company's work.

It's not smart play by the director, though. There's a lesson there for the future.

Thanks (0)
My photo
By Matrix
04th Feb 2020 12:28

I wouldn’t claim without a VAT invoice in the company name. The rules are relaxed, for example, VAT on a personal phone bill but I wouldn’t treat this computer in the same way.

Thanks (0)
paddle steamer
By DJKL
04th Feb 2020 13:24

Unlikely to be below £250 so afraid I would not have claimed.

Thanks (0)
avatar
By spidersong
04th Feb 2020 13:42

Is there any personal use of the laptop and is it generally kept on business premises, or is it taken home (or is the business home based)? Also is there a reason why it was personal rather than on a company account/company card?

If it's clearly business use only and there's a sensible reason why it had to come through him acting as essentially a purchasing agent for the business, then given that the company immediately seems to have paid for it then I'd claim it. It's the sort of thing I'd have not raised too much of a fuss over back when I was on the HMRC side of the table.

However if he's got a copy of Fortnite on there and ignored the business purchasing card in preference to doing it personally then he's made his own bed and can sit up all night with his laptop on it if he likes though!

Thanks (1)
Replying to spidersong:
avatar
By TaxAngel
04th Feb 2020 14:01

Definitely bought only for business as company needed special spec one for a new piece of business. Cost £2.6K. Business is home-based but he has ipad and laptop for personal use. Bought personally because he used his own Amazon prime account and there isn't a company one. Probably didn't give much thought at time because the company wasn't expecting to need to be VAT registered. Bit frustrating that if the company hadn't been incorporated when he bought it, he'd be OK on reclaiming the VAT but because it was, it looks like he might not be entitled to.

Thanks (0)
Share this content