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VAT deregistration - value of assets

VAT deregistration - value of assets

The Revenue guidance explains that you need to put a value on stock and assets on hand when deregistering for VAT, and declare the VAT if >£1k. For a depreciating asset worth c £50k what steps would the taxman expect you to take in order to provide a reasonable value?

If you do it yourself and it really is just a best guess, is that sufficient and do the Revenue ever query the figures declared? If so, is it better to get a professional valuation in the first place?

Any thoughts/comments would be appreciated.


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03rd Mar 2010 16:31

How long is a piece of string

Reasonable steps to a reasonable value are in the eye of the beholder. I've managed a HMRC Dereg section, and yes we did query asset values, but normally the expectation was that the 'customer' would convince us rather than we'd proscribe suitable evidence.

Sometimes a written explanation would be enough (especially with a photo showing that they really had been driving that land rover into brick walls etc.!), sometimes we'd just check local papers/auctioneers etc to see what similar items were selling for (ah....the days before ebay took off, although towards the end of my tenure we we're using that as well). Sometimes the annual accounts would do it, sometimes stocktakers reports etc, occasionally professional valuations.

So I wouldn't particularly recommend a professional valuation (unless you only bought it for £50K a couple of months before deregistering in which case they will be wanting to know what you've done to devalue it that much) in the first instance.

The best thing is to look at it and think, "if I was slightly jaded and cynical, would I believe me if I said that was worth £5000/£500/50p", and if you can answer yes then chances are you won't need to do much more.

Although of course there's always one jobsworth around everywhere!

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12th Jun 2015 15:22

Sorry to resurrect a 5 year old post but

the £5000 limit, is that a tax free threshold in a sense in which you only pay VAT on the asset values above £5000 or if you go £1 over your pay VAT on the whole amount?

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