Input VAT recovery

I act for a client who over the past year or so has purchased two CAD (computer-aided design) software systems from a computer supplier to enable him to measure jobs efficiently and accurately. The client is in the business of engineering design and the systems cost £4 000 each.

My question is simple: in terms of input tax recovery would the cost of the first system be claimable on his first VAT return under the preregistration input tax rules – he bought it one year before he was VAT registered.

He bought the second system in a VAT period after he was registered and using the flat rate scheme – so can he claim input tax on the basis that it cost him more than £2 000 including VAT?

Query 18 230 – Brunel

Reply from Gardener

Many people in Brunel’s position claim this VAT...