Pre-incorporation, pre-registration and post-registration input tax

Produced by Tolley
Pre-incorporation, pre-registration and post-registration input tax

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Pre-incorporation, pre-registration and post-registration input tax
  • Pre-registration VAT
  • Goods
  • Services
  • Partial exemption
  • Property expenditure
  • Capital items
  • Claims by businesses that were previously registered
  • Pre-incorporation
  • Post-registration

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant changes began to take effect across the UK’s VAT and customs regime. This document contains guidance on subjects potentially impacted by these changes. Before continuing your research, see the Brexit — overview guidance note.

This guidance note provides details of when VAT can be recovered by businesses who incur VAT before they register for VAT and once the VAT registration number has been cancelled. This guidance note should be read in conjunction with the What is input tax and Claiming input tax guidance notes.

Usually the right to recover VAT can only be given to a business that is registered for VAT at the time the relevant supply was received. However, there are instances where a business that is not registered for VAT can incur input tax and, providing certain conditions are satisfied, the business can reclaim the VAT incurred. The general principles are explained below.

Pre-registration VAT

If a business incurs VAT before the date of registration in respect of activities that would entitle the business to reclaim VAT, this VAT can be recovered if the following conditions are satisfied:

Goods

Input VAT can be recovered on goods purchased before the effective date of registration where the following conditions are met:

  1. supplied to a business before it has become VAT registered, provided the business has not supplied or consumed these goods before the effective date of VAT registration

  2. imported from a non-EU country before the business registered for VAT, provided the business has not supplied or consumed these goods before the effective date of VAT registration

  3. acquired from another EU member state by a business before it became registered for VAT, provided the business has not supplied or consumed these goods before the effective date of

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