My client is in the process of buying a guest house.
The vendor is registered for VAT but my client at this stage does no wish to register. He believes he may trade under the registration threshold and even if this proves not to be the case, he would like to bide his time on a decision as to register or otherwise.
Am I correct in my understanding that my client's non-VAT registered status means:
- The fixtures and fittings within the sale agreement will be subject to VAT, so he will pay in this case an extra £6,000 based on F&F of £30K.
- Should he later have to (or choose to) register he will be able to claim this VAT back, assuming that registration takes place within 4 years of the purchase of the business.
Any clarification in respect of the above would be extremely gratefully received.