Contracting - Flat Rate Scheme and Reclaiming VAT

Danger Phoenix

Danger Phoenix

Danger Phoenix

Soldato
Joined
21 Jul 2004
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Location
Harrow, UK
On the Flat Rate Scheme you can't claim back VAT, but apparently if the purchase is £2000+ inc VAT I can.

Would this mean that I save roughly 20% on my Corporation Tax and then an additional 20% on VAT, resulting in the purchase costing my company £1200?
 
The purchase has to be a Capital Asset in order for you to be able to claim back the VAT if you are on the flat rate VAT scheme. It's not any purchase over £2k.

Presumably then as a capital asset you need to depreciate it and offset that against your corporation tax rather than the value of the entire item, though I'm not 100% on that.
 
Reclaim 20% VAT on the inclusive price, i.e. £333 on a £2k item. The exclusive price then gives you CT relief assuming you have AIA to cover. So all being good you'd save £667.
 
[TW]Fox;24776158 said:
The purchase has to be a Capital Asset in order for you to be able to claim back the VAT if you are on the flat rate VAT scheme. It's not any purchase over £2k.

Presumably then as a capital asset you need to depreciate it and offset that against your corporation tax rather than the value of the entire item, though I'm not 100% on that.
Click to expand...

It is going to be a Capital Asset.

Pudney said:
Reclaim 20% VAT on the inclusive price, i.e. £333 on a £2k item. The exclusive price then gives you CT relief assuming you have AIA to cover. So all being good you'd save £667.
Click to expand...

Sorry but how did you get £333?
 
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