Capital expenditure on Flat Rate Scheme

kddh · 13 February 2019 at 5:26PM

Hi all,

I'm looking to build a new computer for photo editing and administration for our limited company business. We're registered to the VAT flat rate scheme. I'm aware that we're able to claim back the VAT on purchases made over £2000.

The components we want total over £2000 including VAT, but if we order on Amazon (for example) in a single order but the items come from multiple different sellers will this prevent us being able to claim back the VAT?

It states the following on the gov.uk website:

"Examples of a single purchase are:
a computer package (computer, printer, camera, scanner, speakers, and so on) bought as 1 package is 1 purchase of capital expenditure goods – if the package costs £2,000 or more (including VAT) then input tax can be claimed"

The components will be ordered in a single purchase but there will likely be different sellers fulfilling it.

Thank you in advance for any help.

00ec25 · 13 February 2019 at 6:57PM

I note you quote the first example, but not the second....
items of kitchen equipment (a pizza oven, a fridge and a dishwasher) bought for a restaurant – if all the items are from 1 supplier at 1 time, then they count as 1 purchase of capital expenditure goods – if they are from 3 different suppliers or at 3 different times then they will be 3 purchases and each must be £2,000 or more (including VAT) to qualify for a reclaim of VAT

I assume you are purchasing on the Amazon marketplace, so are indeed buying from multiple different suppliers. The fact you intend to incorporate the components into a single asset - "the new computer", does not alter the fact the individual purchases are each below the capital threshold.

the other example perhaps also illustrates it if you substitute computer parts for "bricks" - the sum of the parts does not make a whole in that sense
shopkeeper buys bricks, cement and fittings from their local builder’s merchant intending to employ a builder to convert them into an extension of the business premises – no VAT is reclaimable as bricks and so on, are not capital expenditure goods

kddh · 13 February 2019 at 8:08PM

Thought so. Thanks very much for clearing it up for me.

Capital expenditure on Flat Rate Scheme

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