In message id on Tue, 1 Jul 2003
13:01:21 +0000 (UTC), John Owens wrote in uk.business.accountancy :
As the others have said this is unusual and more details might be necessary.
You mention grants - who is supplying them? If it is Government it may be that VAT exemption may apply and VAT is no longer an issue. Your operating expenses and capital purchases will all go up by the VAT element.
You mention that Yr 2+ income will depend on business model chosen. VAT is a tax on supplies made and thus relates to your source of income. Some income streams have VAT liability, some may not. Some may be exempt, some may be partial exempt. VAT IS complicated but if you don't tell anyone how you plan to make your income, they won't be able to tell you what the VAT implication is.
If the models are very different, VAT may apply in one scenario but not in another. VAT will thus be very relevant and would need to be taken into consideration so that the appropriate model is chosen and cashflows adjusted accordingly.