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VAT on services 6 months pre registration

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The fourth bullet point of 11.3 of  VAT notice 700 states:

"the services were not related to goods which you disposed of before you were registered"

HMRC guidance (https://www.gov.uk/hmrc-internal-manuals/vat-input-tax/vit32000) states:

"Six months represents a period in which it is deemed that services obtained will relate to business activity carried on at the time of registration." but then goes on to add: "A business may not use regulation 111 to recover tax on goods or services that formed part of onward supplies it made before the effective date of registration."

My context is an estate agent client who pays for listings of properties on the Rightmove platform who invoice monthly based on a package of services that relate to that particular month. I would therefore argue that this service forms part of supplies made pre-registration, yet the part above from VIT3200 suggests a "deemed" six month period as being gospel, with no apparent legislative basis.

I would welcome members' opinions here please.

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By bettybobbymeggie
25th Jun 2019 16:19

It seems the legislative basis for the "deemed" six months can be found in 111 itself:

"(2) No VAT may be treated as input tax under paragraph (1) above—

(a)in respect of goods or services which had been supplied, or, in respect of goods, save as the Commissioners may otherwise allow, consumed—
(i)by the taxable person, or
(ii)in the case of paragraph (1)(b) above, by the person who imported, acquired or was supplied with the goods or services,before the date with effect from which the taxable person was, or was required to be, registered,
(b)in respect of services performed upon goods to which sub-paragraph (a) above applies, or
(c)in respect of services which had been supplied—
(i)to the taxable person, or
(ii)in the case of paragraph (1)(b) above, to the person who received the services,more than 6 months before the date of the taxable person’s registration."

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