I’m on the flat rate VAT scheme for small businesses and have recently paid over £2,000 for membership of trade organisation. Can I claim the VAT back on that fee as a capital asset?
Under the flat rate VAT scheme, you are not permitted to reclaim VAT paid on any purchase, unless it is a capital asset costing £2,000 or more. The capital asset acquired must be a physical good, not a service. So the payment to join the trade organisation does not qualify as a capital asset for the flat rate VAT scheme, and you can’t reclaim the VAT.