ACCA TX UK Syllabus F. Value Added Tax - Circumstances for pre-registration VAT can be recovered - Notes 2 / 3
Recovery of pre-registration input VAT
Input VAT incurred prior to VAT registration can be recovered on goods and services purchased in certain circumstances.
These include:
| Purchased item | Goods | Services |
|---|---|---|
| Time limit? | Cannot be acquired more than 4 years prior to registration. | Cannot be supplied more than 6 months prior to registration |
| Purpose? | Must be acquired for business purposes | Must be acquired for business purposes |
| Still in hand? | The goods purchased that pre-registration input VAT will be claimed on must still be in inventory prior to registration. | Services are consumed immediately as they are provided. Therefore, this is not applicable. |
How do we claim the pre-registration input VAT?
We treat these goods/services as being purchased on the first day of VAT registration, therefore we will claim the input VAT when we file our first VAT return.
Illustration:
Sunil Ltd. registered for VAT on 31/01/2026.
He has to file his VAT returns quarterly, and his first return will be filed on 01/04/2026.
Sunil Ltd. purchased inventory for the business on 31/03/2025
This inventory is still in stock. It’s VAT inclusive price is £120.
How will the input VAT for this purchase be treated?
Solution:
Sunil Ltd. will claim the £20 (input vat paid) on his first VAT return in 01/04/2026.
This is because these goods qualify to have pre-registration VAT claimed on them.
They are used for business purposes, still in stock and purchased within 4 years of VAT registration.