Recently took on a new client who informed me that he had recently registered for VAT (standard rate scheme) so in his first VAT return (due for submission next week) I've made sure he's recovered VAT on purchases before registration (4 years on goods still held & 6 months on services).
However, he's just informed me that he actually registered for the flat rate scheme! I've done a bit of digging on the HMRC website and VAT Notice 733, para 7.6 says this...
7.6 Can I recover VAT paid before registration on goods and services?
Yes. Record the claim for eligible VAT in your VAT account for your first VAT return.
For details of the rules for claims, see Notice 700/1 Should I be registered for VAT?
If you do claim VAT on capital assets on hand at registration and dispose of them later, you must account for VAT at the standard rate of VAT under the normal VAT rules.
To me, that says that he can still claim back the VAT on all purchases (bearing in mind the usual time restraints) before registration and not just on capital purchases over £2000. Just wanted to see if people on here are in agreement with this?
