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Backdated VAT

05 May 2015
Issue: 4499 / Categories: Forum & Feedback , VAT

Can input tax be recovered on goods purchased in the past eight years?

It seems that the previous accountant of our new client did not like VAT. That accountant obtained an agreement from HMRC that the client an arable farmer did not need to register for VAT on the basis that he makes zero-rated supplies only.

I have now arranged for the farmer to be registered for VAT backdating the registration for four years in accordance with VAT Notice 700/1 paragraph 5.2. The first VAT return has been submitted which includes a claim for input tax on the invoices for combine harvesters and tractors as well as other machinery that is still used on the farm and was purchased in the past eight years.

Instead of issuing a large repayment HMRC are arguing that the VAT claimed on the invoices for the four years before the backdated registration needs to be adjusted so that the claim is...

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