Reclaim VAT under FRS...

[johhnysalad]

Today I had the dubious honour of correcting my accountant (who really should know better !) about the ability to reclaim input VAT on single capital purchases greater than £2k. They claimed it wasn't until I suggested the look at this

15.2 Reclaim of VAT on capital expenditure goods

If you use the flat rate scheme, you can reclaim the VAT you have been charged on a single purchase of capital expenditure goods where the amount of the purchase, including VAT, is £2,000 or more.

You deal with these capital expenditure goods outside the flat rate scheme. This means that you claim the input tax in box 4 of your VAT return.

If the supply is:

* more than one purchase
* under £2,000 including VAT or
* of services

then no VAT is claimable, as this input tax is already taken into account in the calculation of your flat rate percentage.

So, if someone offers you a deal on that £2,100 laptop/server/van, only negotiate a £99 discount

[malvolio]

Today I had the dubious honour of correcting my accountant (who really should know better !) about the ability to reclaim input VAT on single capital purchases greater than £2k. They claimed it wasn't until I suggested the look at this



So, if someone offers you a deal on that £2,100 laptop/server/van, only negotiate a £99 discount

Not really news, this has been publicised before and is raised quite frequently.

I would be more worried that your accountant doesn't know this though - what else is he getting wrong? You don't pay him to not know the rules, especially basics like this.

[johhnysalad]

I would be more worried that your accountant doesn't know this though - what else is he getting wrong? You don't pay him to not know the rules, especially basics like this.

Malvolio,

Yes, I intend to raise this. The person I deal with day to day I suspect is more of an administrator - but so what. I pay for a service. What I'm worried about now is if they failed on this, can I count on them for more complex advice?

[dude69]

Malvolio,

Yes, I intend to raise this. The person I deal with day to day I suspect is more of an administrator - but so what. I pay for a service. What I'm worried about now is if they failed on this, can I count on them for more complex advice?

My experience of so-called professionals is many of them have less knowledge than you can acquire from a couple of hours reading.

I once had occasion to contact a solicitor, and was quizzing him on the finer points of the relevant law, and he didn't have a clue what I was talking about.

There are of course accountants and lawyers who do know their stuff, the intricacies of HMRC note #362A, etc. and you can work on recommendations, but when you signup you will probably end up with a different practitioner anyway.

[malvolio]

My experience of so-called professionals is many of them have less knowledge than you can acquire from a couple of hours reading.

I once had occasion to contact a solicitor, and was quizzing him on the finer points of the relevant law, and he didn't have a clue what I was talking about.

There are of course accountants and lawyers who do know their stuff, the intricacies of HMRC note #362A, etc. and you can work on recommendations, but when you signup you will probably end up with a different practitioner anyway.

The difference being they have a duty of care and a legal responsibility for correct, informed advice. This bit of VAT law is not exactly obscure, and the OP is entirely right to follow this up.