I am a director of a limited company.
As we are not VAT registered, am I able to purchase computer parts and get the VAT back, or do you need to be registered to do that?
Also, since there is very little money in the bank account, if I buy the parts on my own credit card and get the invoice made out to the company, is this acceptable?
TIA
Martin
Yes you need to be registered.
The good news is if do you register you can reclaim the VAT on goods bought prior to registration retrospectively if the goods are still within the company. Naturally you still need the VAT receipts.
Yes.
DG
No and yes.
For the purposes of your accounts, yes. It creates a SoGA problem though, but I guess this is not an important consideration.
What SoGA problem does this create?
Is a consumer transaction (and thus regulated) or a business transaction (and thus not). The problem is with the seller rather than the buyer, uless you want to take the item back.
tim
That sounds like a potential SOGA benefit.
You need to be registered, and you need to be making taxable supplies in order to register.
Registering normally means you pay money to Customs, not the other way round.
Yes.
What problem is with the seller?
Where the buyer is acting as a consumer, his rights under SoGA against the supplier are only marginally stronger than as a business.
But in any case it is clear from the scenario as described, that as the invoice is issued to the company, it cannot be a consumer deal. How the debt is settled is immaterial to the transaction which created the debt.
I dare say he could make it a consumer deal, though, by buying the item personally and then selling it on to his company (but that could create a VAT problem, but only if the company is registered and he is not, which is not the case).
It happens ( So I've heard !) that a great many petty disbursements (Travelodges, big fuel bills & the like) are settled and the receipts bear the name of the employee with nairy a problem with the VAT inspector.
This is comment not advice.
DG
A very simple concept but hard to explain in a sentence or two. 8-((
But one does one's best.
If your customers are normally VAT registered 14.9% of their total bill will be VAT which they can reclaim. So no sweat for them. Meanwhile, back at the ranch, you will be able to recover the VAT on all your inputs. This will reduce their cost to you by 14.9%.
But if you are in an abnormal category. IE normally deal with UK charities, normally deal with VAT registered entities overseas in the EU and many other complicated categories, it can be in your interests to register. It makes a big difference to get it right.
To be honest if you are not dealing with simple retail customers on a small scale, I'd speak to a local accountant. They don't bite.
If OTOH you are dealing with simple retail supply, and if you are successful, it's only a matter of time before you must to register.
DG
HMCE are quite happy with it most of the time. The EU isn't so happy about it and is trying to get Customs to stop allowing this.
Farmers usually get a big VAT cheque as they sell zero-rated items.
cd
And greengrocers. :)
Surely greengrocer's :)
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