Input VAT – Non registered ltd company

[Millerx]

Hi,

I have an LTD Company that provides management consulting services and it is not a vat registered. So far, I had 1 client and I did not charge any VAT. I purchased a PC for my professional use on which I paid VAT. I understand that I need to register for VAT to be able to claim it back. Here are 3 precise questions I have and I thank you for your help:
1. If I register for VAT, should I charge VAT for my next clients? (suppose that revenues remain under the threshold of 85 000£ for this tax year)
2. Should pay back any VAT to HMRC on the previous revenue (on which I did not charge any VAT)?
3. If I don’t need to charge VAT for the future invoices (output VAT), can I only claim the expense on my professional expense (input VAT)?

Thanks a lot for your help.
Best,
MED

[vatconsultant]

1. If I register for VAT, should I charge VAT for my next clients? (suppose that revenues remain under the threshold of 85 000£ for this tax year)- You can register for VAT voluntarily if you are below the threshold. However you may need to weigh the pros and cons of VAT registration if your sales are that low. Once you register for VAT you will have to charge VAT on your invoices and you will recover in put VAT from your suppliers – i guess as a management consultant you have a few invoices from suppliers. You can also recover VAT on computer as long as its used in business.

2. Should pay back any VAT to HMRC on the previous revenue (on which I did not charge any VAT)?

In some circumstances you can pick an effective date of registration of VAT before the actual date you are applying for registration. Prior to the effective date you can reclaim input VAT on your first VAT return (in the previous 6 months for services and 4 years for goods provided they are still in your possession).

3. If I don’t need to charge VAT for the future invoices (output VAT), can I only claim the expense on my professional expense (input VAT)? You cant choose to claim VAT and not charging VAT on your supply. You can apply for de-registration but the VAT claimed on computer may need to be paid back.

[Author]

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