Late VAT Reg - Ltd Company over threshold

A

accsvalue

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Ltd Co providing services has just completed its first year of trading with a turnover of €65k. It hasn't registered for VAT but has just applied to Revenue for VAT registration.

Does the company have to backdate sales VAT since it is over the €37,500 limit? What about reclaiming purchases VAT? As far as I'm aware VAT registration can only be backdated to the start of the current VAT period.
 
Well first thing to do is calculate the loss to the exchequer, if any. If there were substantial setup costs for which there would have been input credit, then there may be little or no VAT lost. Revenue can't impose VAT registration for output (sales) VAT only - if they say the company should have registered from the get go, then it will be entitled to its input VAT also.

If the company deals mainly with VAT registered businesses who would be entitled to full deductibility themselves for any VAT charged by the company, then you're into a justifiable case for arguing there's been no loss to Revenue.
 
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