The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
This guidance note deals with the purchase of capital expenditure goods by businesses using the flat rate scheme and what to do if a business decides that it no longer wishes to / is no longer eligible to remain in the flat rate scheme.
Capital expenditure goods are items purchased by the business that are not consumed by the business. Typical items are vehicles, computers, manufacturing machinery and other office furniture or electrical items. Anything that is consumed in respect of these items are not capital goods (ie paper, toner, fuel, etc). The flat rate scheme specifically excludes the following categories and these cannot be treated as capital expenditure goods under the flat rate scheme:
goods that are purchased for resale by the business
goods that are incorporated into other goods prior to resale by the business
goods used to generate business income from being leased, let or hired
goods that are consumed or completely used by the business within 12 months of purchase, import or acquisition
goods that are included within the scope of the capital goods scheme (see the Introduction to the capital goods scheme guidance note)
It should be noted that if HMRC has specifically excluded the right to deduct VAT on certain goods, the business will not be able to recover any VAT incurred on these goods via the flat rate scheme. See the What is input tax guidance note for more information.
If a business is using the flat rate scheme it cannot normally recover VAT incurred on any costs associated with the business. However, it is possible for VAT to be recovered on the purchase of capital expenditure goods if the cost of the good is £2,000 or more including VAT. The business will be required to deal with the purchase of qualifying capital expenditure goods outside of the flat rate scheme and account for VAT in the normal way.
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
IntroductionSubsistence is the amount incurred as a consequence of business travel. Typically it relates to accommodation and meal costs incurred. These amounts are allowed because they are associated with the necessary travel. See the Travel expenses guidance note for more information of when
Normal due dateSmall companies (including marginal relief companies) are required to pay all of their corporation tax ― nine months and one day ― after the end of the chargeable accounting period.For example, where a chargeable accounting period ends on 31 December 2018, the due and payable date for
Duty to prepare trust accountsUnder the laws of England and Wales, trustees have a duty to account to the beneficiaries for their financial administration of the trust fund. This duty is established by a substantial body of case law. In the case of Armitage v Nurse, Millett LJ stated:“Every
Business asset disposal relief (previously known as entrepreneurs’ relief) is a capital gains tax (CGT) relief that allows business owners with chargeable gains on qualifying business assets to pay CGT at a rate of 10%. For disposals made on or after 11 March 2020, the relief is available on up to
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.