Backdating voluntary vat registration
There is no provision for retrospective voluntary deregistration. You must normally remain registered for 2 clear calendar years after your registration date. This means that a trader who is already registered can not apply for retrospection. If a trader who has not been registered before, and is currently trading below the threshold wishes to register for an isolated past period provided an entitlement to registration existed from the earlier date, and throughout the period requested, you can agree to registration from that date. You take your total input tax figure away from your total output tax figure and pay the balance to HMRC. You will have to: NETPs - voluntary registration
Accounting for VAT 5. In addition, where output tax values would be low but input tax values high, it is possible to backdate the date of VAT registration by up to four years, giving a maximum claim period for goods for eight years. In our opinion, he can not ignore the period of his previous registration because it was during this period that his entitlement to be registered from an earlier date was extinguished. If your input tax is greater than your output tax, you claim the difference back from HMRC. This will normally be the registration date you asked for. The application may take longer to process if we need more information from you. This has led to inconsistent treatment of output VAT on such assets. In our view paragraph 9 is to be read as a whole. They include private individuals as well as: If a trader who has deregistered applies to re-register for a period prior to or up to their original EDR you should not allow registration for this earlier period. The restriction on expenditure incurred prior to the date of registration is to take account of the consumable nature of services and, unless the VAT is clearly not incurred in the making of taxable supplies, there is no need to examine the claim further from this point of view. When looking at recovery of pre-registration expenditure it is important, because of the time limits, to ensure that the date of registration is the most beneficial for recovery of VAT. It is therefore important to get this right first time. For more information, please see VAT Notice Submit your application as early as you can so that HMRC can let you have your registration number in good time. Section 3 tells you about the threshold and how to work out if you need to register. NETPs - basic information 9. A suggested form of words for this authority is at paragraph A relevant supply includes the supply of an asset which incorporates parts on which such a repayment has been, or will be, claimed. This will impact all newly registered businesses and could present a further squeeze on start-up businesses. See VAT Notice If you make distance sales in the UK of goods which are subject to Excise Duty, there are special rules. If a trader applies now to be registered for the first time with an EDR earlier than the current date you may allow registration no further back than four years from the date the application is received, subject to the trader having an entitlement to registration for the whole of that period. Section 4 explains how to register. If a trader who is registered requests backdating of their EDR you should not normally allow retrospective registration to an earlier date.
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