Register for VAT for big purchase?

buckman

Should or Could I register for VAT for a large purchase i am making for my business ?

My turnover isnt anywhere near the threshold but I have been awarded a 50% Government grant to buy new equipment for my business.

However the grant which goes up to £20,000 only covers 50% with me finding the other 50% PLUS the VAT (as the grant doesnt cover VAT)

Therefore If i am finding my £10,000, I also have to add on the VAT on the total £20,000 to my half (which is about £3000 just in VAT)! = so i pay £13,000 to their £7000 in effect, so im now paying around 65% of the grant!!

how easy is it to register for VAT and how quick is it? or can I buy the items and have up to 6 months to register for VAT to claim the vat back?

Obviously in these tough times If i can save an extra £3000 odd, via VAT thatr would be handy but have no idea how to go about it

I have to put a deposit down now to hold some of the equipment before xmas but i suppose the VAT will be on the final invoice/bill from the shop in the New year when i purchase everything?

PS: Could i then de-register as I dont make enough from my business at the moment to be worrying about VAT - is it easy to register for a big purchase then de-register? - is that legal?!

Elaine_Wilson

Are you expecting to have to register eventually? If so, then it could be a good idea to register early in these circumstances.

Are your customers VAT registered? I not, then you could be worse off unless you feel they will stand a 15% increase in the efective price.

When you deregister you will have to pay back VAT based on the value of the equipment at the deregistration date so you wouldn't gain much by that scheme.