VAT Input tax and the Flat Rate Scheme
Posted: September 2nd, 2011 in Uncategorized |
Flat Rate Scheme
A business using the Flat Rate Scheme should not claim input tax on its VAT Returns.
Input tax may however be claimed on individual purchases of capital expenditure goods with a VAT inclusive cost of £2,000 or more. Note that Input tax cannot be claimed on expenditure which relates to work performed on a capital item, for example the refurbishment or extension of premises.
A business which has newly registered for VAT may also claim VAT on stock and assets on hand at the time of registration subject to the normal rules for such claims.
If a business using the FRS is required to account for acquisition tax on the purchase of goods from a supplier elsewhere in the European Union (EU) this cannot be claimed as input tax unless it relates to the purchase of capital expenditure goods costing £2000 or more including the related VAT.
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