VAT for start-ups

It takes a lot of planning to start a new business from scratch. You may have to pay up front for some goods and services before you form the company to trade from.

Once your company is VAT registered you can claim back VAT incurred on those pre-incorporation costs, if there is a direct link between the costs and the future sales made by the company. But there are four other conditions to be aware of:

Any goods acquired either to sell or use in the business must have been purchased no more than four years before the VAT registration date, and they must still be held on that day
Services must have been incurred no more than six months before the VAT registration date
The goods or services must be supplied to a person who becomes a director, employee or shareholder (not necessarily all three!) of the company when it is formed
The company must reimburse the individual for those costs, or undertake to pay the costs directly
Talk to us at an early stage of your new business and we can help you reclaim all the VAT which is due.