VAT Question

BanjoSpanner

Question: can a company registered for VAT claim the VAT back on expenses before it earns any revenue ?

I've just established a new startup and am incurring significant setup expenses including:

Equipment
Light/Heat
Telephone
Diesel (travelling to potential clients and to events)

The business is not forecast to earn any revenues until Q2-2014 but in the meantime it is incurring expenses. So can the VAT be reclaimed ?

Skybox

Once you are registered for VAT, you can claim back VAT on expenses. Revenue could query the light/heat bills, telephone, diesel and you need to be able to show that these expenses are solely for the new startup and are not personal in nature. I had a client who set up a company and was in a VAT refund position for the first 4-6 months while getting the business up and running.

Lemmy18

Apologies for piggy backing this but I have a similar question.

I'm set up as a sole trader and am using my private car for transport.

I'm claiming mileage as an expense and also 60% of the vat.

Can I put a percentage of my net diesel costs through my purchases day book although I'm claiming mileage?

Thanks in advance.

Skybox

Strictly speaking, if you are claiming mileage as an expense, you cannot claim the VAT on diesel costs, nor should you be putting diesel through as an expense.

Lemmy18

Skybox wrote: »

Strictly speaking, if you are claiming mileage as an expense, you cannot claim the VAT on diesel costs, nor should you be putting diesel through as an expense.

Thanks for that.

Alan Shore

A sole trader claiming mileage as an expense!!!!

A sole trader can claim expenses that are incurred ie diesel, motor insurance, motor tax, motor repairs, and adds back the personal element at the end of the year.

An employee can claim mileage!

Lemmy18

Alan Shore wrote: »

A sole trader claiming mileage as an expense!!!!

A sole trader can claim expenses that are incurred ie diesel, motor insurance, motor tax, motor repairs, and adds back the personal element at the end of the year.

An employee can claim mileage!

Oh Crap!!!!!

I've recently done my level 5 bookkeeping as part of setting up the business and was told by the tutor I could just go the expenses route on the car. He does it himself.


I think I need a sit down with an accountant..................

dbran

Hi

As AS said, this route is only available to Limited companies and not sole traders.

dbran