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VAT reclaim on VAT exempt business?

  • 17-01-2019 7:17pm
    #1
    JohnCleary
    Registered Users, Registered Users 2 Posts: 10,209 ✭✭✭✭


    Hi all,
    If you are a VAT exempt business, can you reclaim VAT back on your purchases?

    Google tells me no, which makes sense as otherwise you'd just be reclaiming VAT the whole time from business expenses.


Comments

  • #2
    Stratvs
    Registered Users, Registered Users 2 Posts: 958 ✭✭✭Stratvs


    No. VAT Exempt businesses don’t charge VAT on sales and just pay the VAT included in any purchases.


  • #3
    JohnCleary
    Registered Users, Registered Users 2 Posts: 10,209 ✭✭✭✭JohnCleary


    Stratvs wrote: »
    No. VAT Exempt businesses don’t charge VAT on sales and just pay the VAT included in any purchases.

    Thanks for the quick response.

    So, essentially, there is no advantage of being VAT Exempt, apart from the fact that your service appears more attractive from a price point of view? (The end customers would not be claiming the VAT back, regardless).


  • #4
    Stratvs
    Registered Users, Registered Users 2 Posts: 958 ✭✭✭Stratvs


    The VAT exempt business will still be passing on, as part of its cost, the VAT it paid included in its purchases. So it’s charge will presumably reflect that.

    VAT exempt businesses should not be confused with non VAT registered businesses. Taxis and undertakers for example are VAT exempt. A clothing outlet with turnover under the registration threshold clould be non VAT registered. Both will suffer VAT on their inputs and will not be charging VAT on their outputs but they are not the same.

    The type of business will dictate whether it is VAT exempt. It is not a question of any business choosing to be exempt.


  • #5
    JohnCleary
    Registered Users, Registered Users 2 Posts: 10,209 ✭✭✭✭JohnCleary


    Stratvs wrote: »
    The VAT exempt business will still be passing on, as part of its cost, the VAT it paid included in its purchases. So it’s charge will presumably reflect that.
    I have my prices set for the next year. Currently, i'm happy with my income vs. overheads. I just thought I may have been missing out on something (ie. being able to reclaim VAT, or tell my suppliers to charge me no VAT), but by the sounds of things I have nothing to gain.
    The type of business will dictate whether it is VAT exempt. It is not a question of any business choosing to be exempt.
    I'm well aware of this. According to Revenue, my service (sightseeing) is VAT exempt


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