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Yui commenced trading on 1 April 2014, and registered for value added tax (VAT) from 1 January 2015. Her first
VAT return is for the quarter ended 31 March 2015. During the period 1 April 2014 to 31 March 2015, Yui incurred input VAT of £110 per month in respect of the hire of office equipment.
How much input VAT in respect of the office equipment can Yui reclaim on her VAT return for the quarter ended
31 March 2015?
A £660
B £990
C £330
D £1,320I think Yui can claim the input tax for the period 1 April to 31 March 15 that is £ 110 x 12 months = £ 1,320. But the correct answer is £ 990. So what is the assumption for making the correct answer?
Thank in advance.
Look at the OT course notes, Chapter 24 VAT, Section 1.4 part (b) last sentence on pre registration input VAT recovery.
In relation to services supplied to the trader prior to VAT registration, we can only recover input tax for what has been supplied in the 6 months prior to registration. Hence 6 months plus the 3 months of the VAT period is 9 months @110 per monthWhat is meaning of the hire of office equipment? why is it service? It’s not fixed asset?
Hiring is a service while purchase would be fixed asset right?
Also, then how long can you carry back the purchase of a fixed asset? As in, how long can we recover input VAT on purchase of fixed assets?
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