Transactions entered before the VAT registered setting is ticked (Set Up > VAT) will have a VAT status of being outside the scope of VAT and will therefore be excluded from VAT returns in VT Transaction+.
If you are need to include these transactions in your first VAT return, and are permitted to do so under HMRC rules, you need to add VAT to the original transactions - see Add or change VAT on existing transactions.
The rules on reclaiming VAT on purchases made before VAT registration are given in the following HMRC manual.
