Commentary

V7.233 Capital goods scheme—introduction

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.233 Capital goods scheme—introduction

Part V7 Tax planning | Commentary

Capital goods scheme

V7.233 Capital goods scheme—introduction

The capital goods scheme is intended to prevent a business from gaining an unfair rate of input tax recovery on its capital expenditure. The scheme applies to land and building capital expenditure exceeding £250,000 and computer assets exceeding £50,000 (both figures exclude VAT). Since 1 January 2011, the scheme has been extended to include ships, boats and aircraft costing more than £50,000.

Basically, the scheme means that when considering input tax recovery on major capital expenditure, it is necessary to consider the use of the item over a five or ten-year

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