Claiming pre registration costs is all about whether you still have that product or service to use against vatable sales.
So, if your other company sold stock to this company, and you have already sold them on, no you cant claim. If you have sold 50%, then you still have 50% to sell - so you can claim 50% of the VAT.
If you have issued sales invoices for the services you "bought" from your other company, no you cant claim them.
Hopefully that makes some sort of "bank holiday monday the sun is shining and I have no idea why I am sat at my PC" sense :)
-- Edited by FoxAccountancyServices on Monday 6th of May 2013 11:18:15 AM
-- Edited by FoxAccountancyServices on Monday 6th of May 2013 11:37:35 AM
Hello lovely forum people, been a while since I've been here.
I am director of two limited companies, only one is vat registered. I'm looking to vat register the 2nd business to avoid issues when cross charging for services. i am thinking that cash accounting might be best as there can be a delay in getting paid.
Can you reclaim input tax prior to registration on cash accounting? The 2nd business is almost two years old. I've raised an invoice 31 March (from 1st company) so it's within the 2012-13 financial year. If the 2nd company registers for vat now can the vat be reclaimed?
Also, I went to register online but it says that option isn't available. Is it a paper-based form only?
A more general warning - if you have one business on cash accounting and the other on conventional accounting, and your cross-company charges provide a cashflow benefit at the expense of HMRC, they have power to prevent you using cash accounting. I am sure you wouldn't intentionally do that, but do make a mental note.
