Ken Howard
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Sole trader incorporation and VAT registration

Sole trader incorporation and VAT registration

Sole trader's cumulative annual turnover will exceed £60k at 31/7/05. So VAT registration is required. Also incorporating, preferably at the same time, i.e. 1/9/05.

If the sole trader doesn't register but the Ltd Co does from the transfer date, can the co still reclaim input vat on stocks and equipment on hand, and the prior 6 months services?

Alternatively, does he have to register for vat as a sole trader, perhaps for just 1 day, to guarantee input vat reclamation and then do transfer of vat number for the incorporation?

I don't want to jeopardise losing the pre-registration input vat claim, but likewise would prefer not to have the hassle of too much VAT paperwork (i.e. 2 registration and 1 dereg).

Ken Howard


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By frauke
18th Jul 2005 19:23

VAT paid and claimed before registration
From memory you can reclaim VAT on anything that that actually "exists" on the first day of registration. (Hence when a business de-registeres from VAT it has to repay the VAT on anything that still "exists")

Very few services actually "exist" after the supply date.

Registration for VAT over the internet is easy, and they will normall register the business a month later unless you ask it to be earlier. It makes no difference what the business status is. The rules are the same.

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