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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4423
Experience:  FCCA FCMA CGMA ACIS
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Are there any issues with reclaiming input VAT in a new company

Customer Question

Are there any issues with reclaiming input VAT in a new company that will likely be making quite substantial losses for the first 6-12 months?
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question.
No, it is perfectly normal for a start up company to have substantial input tax to reclaim and minimal output tax to pay in its early trading. Indeed, you can even go back before formation and include relevant input tax suffered too.
It's a real Dad's Army 'Don't Panic' situation. Just make sure that your VAT accounting is accurate, up to date and records maintained. In the days of regular VAT inspections I once had a VAT Inspector demand to see the voucher for 13 pence, yes 13p, of input tax reclaimed!
I do hope I have set your mind at rest on this matter.
Customer: replied 2 years ago.

Thanks Keith. Just getting some comfort here!

Expert:  bigduckontax replied 2 years ago.
Delighted to have been of assistance.
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Expert:  bigduckontax replied 2 years ago.
Thank you for your support.
Customer: replied 2 years ago.
I have received 7 emails in a few hours relating to this question. Perhaps it is because your last post is headed 'your expert needs more information' even though that is not the case.
Expert:  bigduckontax replied 2 years ago.
I am so sorry, there is a glitch in the Just Answer system which is generating these annoying messages. Just Answer staff are aware of the bug, but have not yet managed to fix it.