Our website uses cookies to enhance the visitor experience (what's a cookieCookies are small text files that are stored on your computer when you visit a website. They are mainly used as a way of improving the website functionalities or to provide more advanced statistical data.). Are you happy for us to use cookies during your visits?
Please note: continuing without making a choice equates to giving us your consent, which you can withdraw at any time via our cookies policy page.

VAT on Pre-Incorporation Expenditure

Newsletter issue - July 08.

As you prepare to set up your company you may buy assets ready for that company to use, or pay for services such as legal or accountancy, that relate to the new business. You can reclaim the VAT incurred on those goods and services you purchased personally for the company if all of the following conditions apply:

1. You become a director, company secretary or employee of the company, and the company fully reimburses you for the goods and services you bought on its behalf.

2. You were not VAT registered when you made the purchases and have not used those items for any other purpose.

3. You have not reclaimed the VAT on those purchases through another business.

4. The company must reclaim the VAT in its first VAT return after becoming VAT registered.

There are also some restrictions on the goods and services on which the VAT can be reclaimed.

Goods must be:

  • held at the date the company becomes VAT registered;
  • purchased within 3 years of the date of that VAT registration;
  • used by the company for its trade.

Services must be:

  • purchased for the purposes of the company's business;
  • acquired within 6 months of the date the company becomes VAT registered;
  • not recharged on to a customer before the company became VAT registered.

Newsletter SubscriptionPlease enter your details

Book a Free, No Obligation Consultation

Take advantage of a free consultation to see how you can benefit from using Stanhope accountancy and advisory and find out the best way to deal with your tax, accounting and how to minimise your tax liabilities. Book now >

Get a Fixed Quote

We believe you should always be in control of your finances. For this reason we can offer many of our services on a fixed fee basis on agreed services >

Profitability Strategies

We can help you develop strategies to help your business grow without increasing costs specialized tax incentives to produce multiple benefits and help you increase your profit >

Your Business

Expert tax planning advice any size business tailored to you >