- HMRC has changed its approach to VAT recovery on pre-registration services.
- Previously, VAT could only be recovered on services received within six months before registration if related to post-registration business activities.
- No VAT recovery was allowed for services with both pre
- and post-registration use.
- HMRC’s updated guidance now allows VAT recovery on pre-registration services.
- An example given is a subscription used from September 2024 to August 2025, allowing schools to recover input tax based on taxable use.
- Schools that did not recover VAT on pre-registration services initially should claim it as an error correction or in the annual adjustment.
Source: crowe.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
