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Could input VAT be reclaimed in respect of sales made before VAT registration?
Our client intends to form a company the only activity of which will be to stage a one-off concert. The value of the ticket sales will be less than the VAT registration threshold.
The business expects to sell all the tickets well in advance and will incur little expenditure in relation to the event until just before it takes place at which point all of the tickets will have been sold.
It would seem to be sensible for the business to register for VAT just before the final tickets are sold. The company would then declare a small amount of output tax to HMRC and reclaim in full the VAT on costs associated with the event because the tax point for most of the expenditure would occur post-registration only.
My question is whether HMRC could deny part (or most) of the input tax claim on the basis that...
