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Pre-registration VAT


I have been guiding a client this week following VAT registration and thought I would share a brief overview of the rules in respect of claiming VAT pre-registration. Where a business buys or sells goods or services before it registers for VAT to support taxable business activities it can recover the tax provided that:

  • in the case of goods ( either stock or fixed assets ), the goods remain on hand at the date of registration and will be used in the newly registered business. These goods must have been bought within the previous four years.
  • in the case of services the supply was made not more than six months before the date of registration . Six months represents a period in which it is deemed that services obtained will relate to business activity carried on at the time of registration.

The rules for VAT on pre-registration services are not that different for those for goods, but can be more generous. For example it is usually possible to reclaim VAT paid on rent, telephone and other overhead costs as it can be linked in some part to post-registration supplies.

Please get in touch to make sure you are maximising your input VAT claim on your first VAT return.

With best wishes