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I am a bit confused here. On one hand you mentioned that A should register for VAT as soon as the trade commences and claim all the VAT on the first VAT Return and on the other hand you mention that all this will fall under the existing VAT Return as two trades will be linked ( presumably because parent/subsidiary relationship. What is the point then of having two VAT registrations.
As we are talking about over £100,000 of input VAT why can't A LTD register for VAT as soon as the construction starts. This way A Ltd can reclaim on quarterly basis rather than wait for 18 months the time it will take to complete the building. If there are two separate VAT registration then why should the trades from two businesses be lumped together and enter the totals in the existing VAT registration.
Secondly, would it be okay to build the new property under B LTD and claim all the V|AT on quarterly basis under the existing registration and forget about A LTD.
Thank you for your concession about the second question,
In other words what you are saying is that no input tax can be reclaimed either by company A or company B until the new build is complete and has commenced trading.
Sorry if I am using too much of your time. It is because I am not fully satisfied. I am more confused than before.
In your last reply you confirmed that neither company can claim input tax until there are taxable supplies. In my question I mentioned that company B is trading and has taxable supplies. If taxable supplies is the criteria for claiming input tax then why company B can't claim input tax immediately when the build starts as it is already making taxable supplies? Company B in this case will be the owner of new build.
Second confusion is that why two companies can not have there own VAT registrations because each company is a legal entity own its own right? If company A builds a new property then why it is necessary to include its taxable supplies (when it starts trading) in the existing VAT of company B? Surely company A is a separate legal entity and eligible for its own VAT registration.