Claiming vat refund whilst having no turnover

[davecontractor101]

Hi all

I have a quick question on reclaiming vat.

My company laptop has just died after 7 years so am about to get a new one.

Currently I am not billing as have taken an inside ir35 role. I have kept the company running as I expect to return to contracting with outside roles in the near future.

My question to you is - will HMRC question me/my companies expense reclaim of £300ish of vat on a nil income vat return? My past 3 vat returns have also been nil returns due to the inside role I currently have.

thanks
Dave

[northernladuk]

Edit. Deleted as deemed incorrect info

[northernladuk]

Covered in detail in this thread on more or less the same topic.

https://forums.contractoruk.com/acco...-contract.html

[Lance]

I'll provide an opposing view.

How can you submit your no value VAT claim without a working computer?
If you have no other company computer on which you can do the admin work, then it is perfectly justifiable to buy one.
Claiming money back is potentially a red flag. But it is also legitimate.
If you're not winding the business up then you still need to run it.

Out of interest what do you do with your accountants VAT bill? That is claimed back surely? This is no different.
In fact you could ask your accountant.....

[eek]

Covered in detail in this thread on more or less the same topic.

https://forums.contractoruk.com/acco...-contract.html

Um that thread had nothing to do with any limited company.

It was about why you can't claim a computer through your umbrella employer in the way that many umbrellas allowed prior to April 2017 - before then it wasn't a problem as you were an employee for convenience reasons (so not really an employee) post April 2017 you are likely to be using an umbrella for legal reasons (definitely an employee).

Personally I see nothing wrong in using a limited company to purchase a computer for the work that limited company does.. The issue then comes down to the amount of personal work you do on that computer and there a problem may occur...

But yep I would ask your accountant because it's probably wisest to follow their judgement - it's what you pay them for....

[MonkeysUncle]

I would be inclined to agree with Lance on this one.
Just because there isnt a contract flowing through your ltd, doesnt mean the admin work stops. This still needs to be done in.

[davecontractor101]

Thanks for the replies.

My accountant is on holiday for the next few weeks so may ask her for her thoughts when she returns but was looking for thoughts and comments so I could make a somewhat informed decision sooner…

As monkeysuncle says, the company is still running so there is admin to be done, salary to be paid, bank accounts to be reconciled and the other day to day (or month end) admin you have with running a company.

I do have a personal computer but do not want to start to use this for business purposes.

At some time I will return to contracting but I would also be wanting to keep my current skill set sharp - as the current inside contract is not really making use of some of my skill set.

[hobnob]

I agree with Lance and Eek on this. Based on personal experience, my first contract was outside, so I submitted VAT returns to HMRC and paid them the relevant amount. I then spent 3 years on inside contracts, but I still had business expenses (e.g. accountancy fees and domain registration), so I claimed a VAT rebate every quarter. The total amount I reclaimed was less than the amount I originally paid to HMRC, but I was approaching the "break even" point when I got my most recent contract (outside). I'm not sure what would have happened if I'd exceeded how much I originally paid them.

[jamesbrown]

No issues with a repayment return. For anyone working with overseas clients and still having VATable expenses, repayment returns will be routine.