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bigduckontax, Accountant
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This question is directed to a UK based tax professional. I

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Hi There. This question is directed to a UK based tax professional. I registered a company 18 months ago and started purchasing products from China and branding them for a well known media personality who is my business partner. We are about to launch and I have receipts with approximately 20,000 pounds worth of tax to claim back (we've spent approximately 100,000 so far) - VAT that was paid at port etc when the products arrived (I believe that I have up to 3 years to do this?) - my questions are as follows
We are about to start trading and I expect to reach the VAT threshold in approximately 3 - 6 months
With this in mind
1) If you were in my position would you register for VAT right now and claim back the VAT that I have paid right away - our business is web based so if I go this route then this will mean that I will need to charge VAT on sales immediately (I believe I am understanding this correctly?)
or
2) Should I wait until I reach close to the threshold, then register and not claim back the VAT at that time?
Am I correct in believing that I will not need to change VAT on the first 85,000 but can still claim back in 3-6 months so would be much better off financially if I didn't charge VAT straight away (and am not obligated to do so anyway until I'm close to 85k) but can still of course claim back the VAT in 3 - 6 months since this is well within the 3 years allowed?
Am I understanding the law and my obligations right?
Any advice would be much appreciated
Many Thanks
Mark

Hello MArk, I am one of ythe experts on Just Answer and pleased to be able to help you with your quetiion.

1) I would register now to ease the company's cash flow by reclaiming input tax charged on import. The company will have to charge VAT on sales at the stanfard vrate (20%) for EU sales and zero rate for exports outwith the EU.

That is my advice on this matter.

Customer: replied 6 months ago.
Thanks for your reply Sir.
Assuming cashflow is not my concern at the moment, do we actually have the option to start trading without charging VAT until we get close to the 85k threshhold and then reclaim the VAT we have paid from imports over the past 18 months ?
Am I not right in believing that if we are able to do this then we have charged our clients 17k less for the first 85k worth of sales (which is good for all concerned) and can still get the same 20k back in 3-6 months because we are within the 3 year timefame. Am I understanding this right?

Yes, but you will find it easier to register immediately which prompted my iniy=tial advice. \without registration you lose cash flow both ways.

bigduckontax and other Tax Specialists are ready to help you
Customer: replied 6 months ago.
Thank you for your advice Sir, I appreciate your help !

Thank you for your support.