Claiming VAT back on flat rate scheme. (£2k+ purchases)

[Mailman_1]

Hi,

I've just bought some IT equipment for my LTD co from Dell. I am on the HMRC's flat rate VAT scheme. The equipment totalled around £2.5k including VAT so i want to claim the VAT back as you would. However, Dell in it's wisdom have decided to split the order into 3 seperate orders (Monitors, XPS System and tablet, each order individually totalling under £2k) as the items are built or sent from different Dell facilities. I have requested that Dell put the order all on the 1 reciept but they advise they cannot and will not do so. The item reciepts will all be seperate and probably have different creation dates due to stock availability/build times etc. The only thing which i can find as redeeming is the order date will be the same on all of the reciepts.

I am under the impression from the HMRC guidance that the full order needs to be on a single reciept totalling £2k+. Am i correct in thinking that the HMRC will now treat my purchase as ineligable for a VAT rebate?

TIA

[malvolio]

If it's £2.5k, the difference in the VAT recovery between full reclaim and FRS is about £50. Is it really worth worrying about it?

[Mailman_1]

Are you sure about that? It is my understanding that the £2.5k purchase, of which around £400 of it is VAT, is claimed on top of the FRS allowance. I have retrospectively claimed for items over £2k in the past and it is also the HMRC's understanding.

[malvolio]

If you can claim it as a single expense, it's £400-ish. If you can't and have to include it in the FRS calculation, you gain about £350 from the difference between VAT charged and VAT claimed. It's one or the other, not both.

So £50.

[Notascooby]

If you can claim it as a single expense, it's £400-ish. If you can't and have to include it in the FRS calculation, you gain about £350 from the difference between VAT charged and VAT claimed. It's one or the other, not both.

So £50.

OK Mav - they say there's no such thing as a stupid question....willing to prove this wrong.

Is this only if you sell on the goods?
Or are you saying that if by lodging this as an expense against the company you'd only lose out £50 and if so, can you explain for the stupid question asker please.

[xing]

I'm really interested to how do you lay the profit and loss accounts from this transaction.

If you can claim it as a single expense, it's £400-ish. If you can't and have to include it in the FRS calculation, you gain about £350 from the difference between VAT charged and VAT claimed. It's one or the other, not both.

So £50.

[Mailman_1]

If you can claim it as a single expense, it's £400-ish. If you can't and have to include it in the FRS calculation, you gain about £350 from the difference between VAT charged and VAT claimed. It's one or the other, not both.

So £50.

Sorry Mal, i've just spoken to the VAT helpline who have advised differently. The VAT claimed on the capital expenditure over £2k is claimed in addition to the normal FRS claim. The difference is £400(ish). But i forgot to ask them about the seperate invoice question. DOH!!!

[Notascooby]

Do you have an original order that shows that this was all ordered at once?

I'd staple that to the invoices and you'd have a bloody good arguement IF investigated. Certainly a risk I'd be willing to take.

[malvolio]

Hmmm... That sounds counter-intuitive. My understanding was that you exclude the capital expenditure from your gross turnover else you'd recover VAT at 34.5%, but I could be wrong. A llittle light reading beckons. Watch this space...


Thought I read it right. You claim the purchase VAT back in Box 4 of the VAT100. But it goes on to say:

• You make a single purchase of capital expenditure goods of more than £2,000 in value, including VAT. You must deal with purchases of capital expenditure goods of more than £2,000 outside the Flat Rate Scheme. So, you can reclaim the VAT you paid on them in Box 4 - see the link below to find out what purchases qualify and how to reclaim the VAT.

(my emphasis) which says to me that you exclude the total purchase price from your FRS VAT turnover calculation; in your above case you deduct the £2500 purchase cost

Any accountants want to offer an opinion??

[northernladuk]

Are you sure about that? It is my understanding that the £2.5k purchase, of which around £400 of it is VAT, is claimed on top of the FRS allowance. I have retrospectively claimed for items over £2k in the past and it is also the HMRC's understanding.

Not wanting to be nosey but how long ago was this. HMRC would be interested if most of us were claiming 2.5k's worth of stuff every year or two.