FRS VAT question related to paying for services

[stek]

Just a quick Q usual disclaimers and caveats...

If I pay for (some serious) DC hosting and it's normally under the 2k gross limited for claiming outside the limits in a given period, i.e. monthly, then assuming I option to pay for 12 months in advance for example so it IS over the £2k gross, can I claim the VAT?

For my Plan B.....

[northernladuk]

it must be a purchase of capital goods, not services.

HM Revenue & Customs: Flat Rate Scheme for VAT

Full article is..

Claiming back VAT on capital assets
If you use the Flat Rate Scheme, you can't normally claim back the VAT you spend on capital assets you buy for your business. This is already taken into account in the flat rate percentage for your type of business. However, you may be able to claim back the VAT on certain capital asset purchases with a VAT-inclusive price of £2,000 or more. You make these claims by putting the amount of VAT you were charged in Box 4 of your VAT Return.
These are the rules for claiming back VAT when you buy capital assets:
it must be a single purchase of capital goods with a VAT-inclusive price of £2,000 or more. That doesn't mean you are restricted to claiming back the VAT on a single item - for example, you could buy a pizza oven, fridge and dishwasher, as long as you buy them at the same time from the same supplier and the price is more than £2,000 including VAT
it must be a purchase of capital goods, not services. Capital goods are goods you can use in the business but are not used up by it - for example, a van, computer or bottling machine are capital goods, but not the fuel, printer ink or bottles that go in them. A van leased or hired to you is a continuous supply of services, but one bought on hire purchase is considered a supply of capital goods
you can't claim back VAT on goods that you intend to either resell, or incorporate into other goods to supply on to someone else
you can't claim back VAT on goods that you will let, lease or hire out - for example, a bouncy castle
you can't claim back VAT on goods that you intend to use up (consume) within a year
building materials and work are not capital goods. You can't claim back the VAT if you have building work done (even if it includes expenditure on materials), and you can't claim back the VAT if you buy building materials yourself for someone else to build with
as long as all the other conditions are met, you can claim back all the VAT even if the goods will have some private use. For example, if you buy a van but employees are allowed free use at weekends to move private belongings, you can still claim back all the VAT
there is an upper limit on claims for certain items. If you buy something that falls within the Capital Goods Scheme you must write and tell HMRC and leave the Flat Rate Scheme immediately. Goods that fall within the Capital Goods Scheme are computers or items of computer equipment with a VAT-exclusive price of £50,000 or more, or land and buildings, civil engineering works and refurbishments with a VAT-exclusive value of £250,000 or more

[JB3000]

Just a quick Q usual disclaimers and caveats...

If I pay for (some serious) DC hosting and it's normally under the 2k gross limited for claiming outside the limits in a given period, i.e. monthly, then assuming I option to pay for 12 months in advance for example so it IS over the £2k gross, can I claim the VAT?

For my Plan B.....

The expenditure needs to be on capital (will last for more than a year, e.g. a computer) goods (something you can touch, e.g. a computer).

[stek]

Cheers NLUK I saw that but I don't actually get it;

it must be a purchase of capital goods, not services. Capital goods are goods you can use in the business but are not used up by it

Goods? Does that have to be a physical thing? My prospective hosting is not a physical thing, but it's not 'used up' like ink etc in the example.

Need to read more - in the end it's not a problem, just more something I hope I could get away with and leave more in the coffers.....

[stek]

Thanks chaps, had a look and think and it's patently obvious it's not a valid claimable amount in my circs!

Cheers!

[ASB]

Might make it worth coming off the frs??

[stek]

Might make it worth coming off the frs??

Yeah, spreadsheet-tastic! TRW's job, had enough now....

[SpontaneousOrder]

Cheers NLUK I saw that but I don't actually get it;



Goods? Does that have to be a physical thing? My prospective hosting is not a physical thing, but it's not 'used up' like ink etc in the example.

Need to read more - in the end it's not a problem, just more something I hope I could get away with and leave more in the coffers.....

Its not capital, like an asset you can sell when you don't need it anymore.

I know you can capitalise IP, so capital might not have to be a physical thing. But you can sell IP.