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Posted Sun, 17 Sep 2023 23:21:16 GMT by Ra418
Hi, I recently started a car export business and have found clients over seas. The business plan is as such: We buy new or used cars with 20% VAT, and then sell them to buyers at that same price. The plan is to zero rate the VAT on sale, and reclaim the 20%, which would essentially be our gross profit. My effective date of registration for VAT is 31st of August. I wanted to ask; I understand I cannot charge or reclaim VAT until I am registered with a VAT number. But, can I reclaim the VAT after my application is processed? For example by reissuing the sales invoices to show a Zero Rate? Since the whole business essentially runs off of VAT reclaims, I'm afraid while I wait for the long application processing times, I will have to ask my clients to pay accounting for the VAT in the UK, which will increase my price of the cars I sell. It will also lower the amount of profit in this time.
Posted Mon, 25 Sep 2023 09:44:14 GMT by HMRC Admin 19 Response
Hi,

You are able to recover input tax prior to your registration date on goods and services as long as the business still hold those goods at the point of registration.

You can see the guidance below which explains the criteria:

VAT guide (VAT Notice 700)

You can not re-issue invoices and treat them as zero rated prior to your registration date as you would not be registered for VAT at the point where these sales were made.

Thank you.

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