TAX TIP OF THE WEEK - Becoming VAT registered for the 1st time? Make sure you don't miss out on reclaiming old VAT.
So you probably already know that once your business becomes VAT registered you can start reclaiming the VAT paid on purchases.
However in addition you may also be able to recover VAT that was incurred months or even years ago. This falls into two categories:
Goods/Equipment – you can claim the VAT back from the previous 4 years
Services – you can claim the VAT back from the previous 6 months
There is a condition though, the goods or services much not have been consumed or fully used by the registration date.
Now you might think that rent and telephone bills paid 6 months ago would have been consumed so the VAT is not claimable.
But as long as it can be argued services incurred 6 months ago could have in some little way have contributed to post-registration sales then the condition is met, so make sure you claim back VAT on rents, telephone, internet, accountancy charges.
Hope this was helpful, for lots more tax tips and strategies get a copy of our 71 ways to save tax checklist https://bit.ly/2YQbhv