If you are a small, VAT registered company, you may have opted to join the Flat Rate Scheme for VAT. This means you pay a fixed rate of VAT to HMRC based on sales, and don’t reclaim any VAT incurred on expenses. However, are you aware that there is an exception to the rule of being unable to reclaim VAT on expenses?
Where certain capital assets over £2,000 (including VAT) are purchased, you can reclaim the VAT, provided you meet certain criteria, viz,
If all three criteria are met, then you can claim the input tax in box 4 of your VAT return.
If you wish to discuss the VAT flat rate scheme, or anything else in relation to VAT, then please contact us (01383 621118) to see how we can help.
Julie Downie, Senior Accounts Manager