VAT back on architectural fees?

J

JByrne

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I recently spent almost €4,000 from my personal funds to architects for drawings and site visits etc to investigate a potential premises for a newly formed Limited company (which is not operating yet) of which I am sole trader. The VAT charged at 23% cost me hugely and I'm wondering if I am entitled to claim it back somehow? The premises ended up not suitable for the service type for a couple of unforeseen reasons.
 
Was the company registered for VAT at time of invoice, and (obviously) was the invoice made out to the company?
 
The company (childcare) was and is not registered for VAT and the invoices were made out to the company name and my personal home address
 
JByrne said:
The company (childcare) was and is not registered for VAT and the invoices were made out to the company name and my personal home address
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You have a non-VAT registered company, with an invoice that is (presumably?) not made out to the companies registered address (which is less relevant in any case).
You are not entitled to claim VAT back unless you have a VAT registration.
When you say the company is not operating, have you registered with the CRO?
 
Yes I've registered the company with the CRO, but the services are not operating yet as I am still looking for a suitable premises from which to run them. Therefore the invoices were addressed to company name but at my personal home address. I was under the impression that a private Childcare company cannot register for a VAT number. The childcare fees I will charge are exclusive of VAT, so I will be charged income tax on my own drawings as company director instead. Do I have that correct?
 
JByrne said:
Yes I've registered the company with the CRO, but the services are not operating yet as I am still looking for a suitable premises from which to run them. Therefore the invoices were addressed to company name but at my personal home address. I was under the impression that a private Childcare company cannot register for a VAT number. The childcare fees I will charge are exclusive of VAT, so I will be charged income tax on my own drawings as company director instead. Do I have that correct?
Click to expand...

Childcare is indeed VAT exempt, therefore no VAT registration.
To quote from the relevant Revenue page:
"If you make an exempt supply of goods or services, you are not entitled to reclaim VAT incurred on expenditure in connection with the exempt supply."

Which means you cannot reclaim the VAT from the Architect's invoice.

VAT has nothing to do with the income tax. Of course, in this case the VAT is business expense hence will reduce the profit.

If you are proprietary director (more than 15% ownership of the company), you must submit an Income Tax return even if you have been paid via PAYE system.
 
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