VAT on assets acquired prior to registration

VAT on assets acquired prior to registration

Didn't find your answer?

Client has a dormant limited company. Client buys a yacht for chartering purposes with the intention that the dormant company will own the yacht and trade accordingly. Yacht comes up for sale and for various reasons he purchases it in his own name (it has to be correctly registered and coded for commercial use and apprantly this is easier if you have all of the accreditations). The last conversation I had was that the company should buy it even if he was paying for it but who listens to their accountant?!

Now I am thinking input VAT and capital allowances. Input VAT on goods purchased prior to registration ... no problem provided they are purchased by the entity that is to be registered ...mmm. Input VAT on goods acquired pre-incorporation .. no problem .... but this company has been incorporated already ... mmm. So, thoughts on this specific situation. VAT invoice in name of owner and certain that HMRC will ask to see it before issuing a refund to the newly registered company. Am I better just to incorporate a completely new company?

AIA's ... same kind of problem (connected party) I guess although not actually the biggest concern here.

Particulalry interested in the VAT issue if anyone has nay thoughts ... thanks.

Replies (2)

Please login or register to join the discussion.

By Les Howard
14th Jun 2014 18:01

pre-registration input tax

From your description, I am concerned that the recipient of the supply was not the same as the registered person. HMRC are therefore likely to disallow any claim for pre-registration input tax.

Thanks (0)
By stepurhan
18th Jun 2014 17:24


I believe the "various reasons" for purchase in their own name were related to registering the yacht. It was mentioned in the question that this was easier to do with the accreditations the director presumably has.

The resulting problem is that, unless the director was a disclosed agent, then the company has not bought the yacht. It would be the director purchasing the yacht, and then separately introducing it to the company. Unless the director is VAT registered and this purchase and "resale" to the company can be accounted for through his business, I think you are dead in the water. (to use an apposite phrase)

As you say, if only he had listened to the advice given in advance on this.

Thanks (0)