VAT Return - questions

stockport_hatter

This is a bit long winded so please bear with me......

I sell metal and plastic parts (from the industry i work in) via the phone and customers also have the option of buying online via my web site. It is a part time job hence why i created an online shop as means i can still do my full time job without having to take calls all the time for enquiries / orders. If things are successful then i will quit my 'proper' job.

In June 2009 i registered as a limited company - i chose to trade as a limited company as i felt that this would give customers more confidence in me / the company if they saw it was company rather than an individual (if that makes sense). I also wanted the security of being protected financially if things went majorly wrong (limited liability).

After some debate i decided to change the legal status to a sole trader and so my accountant informed Companies House that the limited company was dormant. In November i officially began trading as a sole trader and since then i have made a few sales so things are looking good on that front.

Between June and November i had incurred various start up expenses i.e phone line, stationary, web site costs etc. Unfortunately some of the invoices i have received have been produced in the name of the limited company (for instance the bill for the phone line). When the account was set up i had the intention of trading as a limited company although this changed at a later date. I also planned to start trading earlier than i did but various things meant that i had to keep putting things on the back burner.

I have my first VAT return to fill in for the period 1st November - 31st December as a sole trader and i have a few queries:

1) Can I enter all expenses incurred on behalf of the company in this VAT return? How far back can I go or will i only be able to enter purchase details from November and December on this return?

2) Can i use the figures from invoices made out to the limited company or would it be construed that the limited company was trading? I guess if the answer is yes to the second part then that itself would cause some problems.

I have posed the above questions to my accountant but he is currently away so i won't get any answers any time soon. Thanks for any guidance, hope it all makes sense.

Rolo_Tomasi

It is the legal entity which is VAT registered, not the business therefore I am assuming that the VAT registration is in your own name. This being the case then supplies to another entity (ie the Ltd company) cannot be included on your VAT Returns.

You can include the VAT on any business assets purchased by you in the 3 years prior to registration (provided you still have them) on the first Return.

TM1976

Technically you don't have a valid VAT invoice because the company of supply is incorrect however I believe you can claim this (providing you keep the reciept) if you can do the following:

Prove the invoice was paid for from the sole trader.
Prove the goods or services were used/consumed by the sole trader.

Having invoices in the name of the Ltd Co. does not in itself mean that the Ltd co is trading however you should get the name of supply changed with these suppliers ASAP to avoid confusion.