Reclaiming pre registration VAT

Can I reclaim pre reg VAT on items/assets purchased for the purpose of business?

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I have been trading without VAT for about 3 years now and in this time I have purchased items that help me trade and source more work everyday (I am a sound engineer and this items are microphones and loudspeakers amongst others that I hire to clients on a job by job basis). These items have been business expenses and obviously already used against income tax in previous self assesments). I recently registered voluntarily for VAT and I’m wondering: am I entitled to reclaim pre registration VAT on these assets that I currently own and use to trade and create business bought in these 3 years prior to VAT registration? If so, do I have to reclaim the VAT of the total value of the items or include some sort of depreciation on each item’s value as time has passed by and current value might be lower than when purchased new? Also thinking this should all have to be done in my first VAT return, am I correct? I use cash basis accountancy and cash VAT scheme.

Many thanks in advance, all help is very much appreciated.

Best regards,

Replies (3)

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Me
By John Charman
14th Apr 2018 21:45

You can go back 4 years for goods still being used, you can also go back 6 months for services.

Put all items in at what they cost, do not depreciate.

These expenses would all go on the first return.

https://www.gov.uk/vat-registration/purchases-made-before-registration

This link should cover everything.

Don't forget to adjust next years tax return for the pre incorporation expenses where you would have claimed tax relief on the VAT element of the expense which you are now reclaiming.

If any of the above doesn't make sense, would recommend using an accountant.

Regards,

John

Thanks (1)
Replying to John Charman:
manzed, sound, sound engineer, audio, audio engineer
By manzed
23rd Apr 2018 18:45

Thanks very much John.

Best,

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Replying to John Charman:
manzed, sound, sound engineer, audio, audio engineer
By manzed
15th Jan 2020 15:56

Hi John,

Would the total VAT element claimed against tax in the 4 previous years become an addition to the total income to tax in the following year?

Thank you,

Juan

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