On 4 November 2016, HMRC published Business Brief 16 (2016) which sets out when pre-registration VAT may be recovered by a taxable business. Although the Brief states that HMRC’s position has not changed its stated aim is to “clarify” when, and to what extent, such input tax may be recovered.

Subject to the general rules on VAT recovery, such pre-registration input tax may be recovered:

• on services received within six months of, and used in the business as at, the registration date

• on stock to the extent the goods are still “on hand” at the registration date

• on fixed assets purchased within four years of, and still used by the business as at, the registration date.

The Business Brief can be viewed here.