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Tax tip: first VAT return

17 June 2024
Issue: 4941 / Categories: Forum & Feedback
Maximise VAT claim on the first VAT return.

Regulation 111 of SI 1995/2518 provides a statutory entitlement to claim VAT on some costs incurred before the effective date of VAT registration on the first VAT return. HMRC summarises the conditions in its VAT Input Tax Manual VIT32000 as follows:

  • ‘In the case of goods (either stock for resale or fixed assets) the goods remain on hand at the date of registration and will be used in the newly registered business. These goods must have been bought within the time limits that are set out in reg 111; for businesses with a registration date after 1 April 2010 the time limit will be four years.
  • In the case of services the supply was made not more than six months before the date of registration. Six months represents a period in which it is deemed that services obtained will relate to business activity carried on at the time...

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