Section A: Objective Test

Zenith Consulting registered for VAT on 1 October 2023. Prior to registration, the business incurred the following VAT on expenses:

• £400 on accountancy services provided in August 2023.
• £600 on a marketing campaign that ran in February 2023.
• £1,200 on computer equipment purchased in November 2022, which is still in use by the business.

How much pre-registration VAT can Zenith Consulting recover on its first VAT return?

Pre-registration VAT can be recovered subject to strict time limits. For services, they must have been supplied within 6 months prior to registration. The accountancy services (August 2023) are within 6 months of 1 October 2023, so £400 is recoverable. The marketing campaign (February 2023) is more than 6 months prior, so £600 is not recoverable. For goods, they must have been supplied within 4 years and still be on hand at registration. The computer equipment (November 2022) meets this, so £1,200 is recoverable. Total recoverable = £400 + £1,200 = £1,600.