vat question?

[skyhuck]

I beg to differ, you can only charge VAT on products & services if you are on the flat rate scheme.

 

"5.2 Adding the flat rate addition to sales

You do not have to add the flat rate addition to your sales, but when you do, you may

keep it. However, you must not charge the flat rate addition on sales of:

• machinery; or

• land, and the repair and maintenance of farm buildings belonging

to other farmers.

And you must not charge the flat rate addition on sales to:

• people who are not registered for VAT; or

• other flat rate farmers."

 

I stand corrected.

 

Seems very strange, as you can claim back the VAT on any capital purchase over £2K. I would have expected them to want the VAT back when you sell it on.

 

My accountant does my returns, so I'm sure he knows what he's doing.

[skyhuck]

Just been for a look on the web.

 

The reason I have charged VAT on capital sales is because I claimed the VAT back at the time of purchase. Because no VAT was charged at the time of purchasing this vehicle, VAT could not be charged when it was sold (if the seller was on the flat rate scheme)

 

It would also seem there are more than one flat rate scheme, so some may be different.

 

Good job I leave these things to my accountant

 

This it taken from HMRC site.

 

 

15.9 Output tax due on disposal of capital expenditure goods

Where you have reclaimed input tax on capital expenditure goods, then you must account for output tax at the standard VAT rate (not at the flat rate) on the disposal price of those goods when they are eventually sold out of the business.

 

Example:

■A business on the scheme buys a delivery van for £6,000 inc VAT of £1,000 and it is not used for anything else. As the van is capital expenditure goods, VAT can be reclaimed. When the business later sells or part exchanges the van, say for £2000, it must account for the VAT on this amount at 20%, not at the flat rate.

Note: If you have not claimed input tax on capital items, either by choice or because it was not allowed, you must include the sale of those items in your flat rate turnover.

[Kev Stephenson]

Are you sure you can claim back the vat when vat in it's own right has not been charged?

 

If I as non vat registered buy a brand new pickup I have to pay the vat in full and cannot claim it back. If I later sell it I will sell it at a price inclusive of vat e.g. £12k, not £10k+vat.

 

Can you as vat registered claim back the vat even though it isn't specifically detailed? Would you then sell it on at £xk + vat?

 

I was alway under the impression (from motor trade friends) that once a vehicle had lost it's +vat status it could not get it back

[Kev Stephenson]

It looks like skyhuck answered most of my post before I got chance to post it

[skyhuck]

Are you sure you can claim back the vat when vat in it's own right has not been charged?

 

If I as non vat registered buy a brand new pickup I have to pay the vat in full and cannot claim it back. If I later sell it I will sell it at a price inclusive of vat e.g. £12k, not £10k+vat.

 

Can you as vat registered claim back the vat even though it isn't specifically detailed? Would you then sell it on at £xk + vat?

 

I was alway under the impression (from motor trade friends) that once a vehicle had lost it's +vat status it could not get it back

 

New cars have VAT on them, but not SH ones, commercials always attract VAT when sold by a normal VAT reg Co.

 

I think

[Yorkshireman]

As far as I can recall NO as the Vat has been dispersed

unless you are making a profit from the transaction

 

then Yes ( though this may only be on the profit )

 

 

but you should seek qualified accountants advice or hmrc

Edited June 27, 2011 by Yorkshireman