Section A: Objective Test

Jupiter Ltd registered for VAT on 1 October 2023. Prior to registration, the company incurred the following VAT-inclusive expenses:

• £1,200 on accounting services in August 2023.
• £3,600 on inventory in July 2023 (all of which was sold by September 2023).
• £6,000 on a computer in January 2020 (still in use on 1 October 2023).

Assuming a VAT rate of 20%, how much pre-registration input VAT can Jupiter Ltd recover?

Pre-registration input VAT can be recovered on: 1. Services supplied within 6 months prior to registration. The accounting services in August 2023 qualify. VAT = £1,200 x 20/120 = £200. 2. Goods supplied within 4 years prior to registration, provided they are still on hand at the date of registration. - The inventory was sold before registration, so no VAT is recoverable. - The computer was bought within 4 years (Jan 2020 to Oct 2023 is < 4 years) and is still in use. VAT = £6,000 x 20/120 = £1,000. Total recoverable VAT = £200 + £1,000 = £1,200.