Good afternoon.
A client would like to voluntary register for VAT has asked whether he could reclaim the VAT on a van he purchased 2 years ago. He still uses the vehicle for running his business.
However, the full cost of the vehicle has already been claimed as capital allowance in the previous tax return. If he claims the VAT back, will I need to amend the 2011/12 tax return as well?
Thanks in advance for your help!
Replies (3)
Please login or register to join the discussion.
Section 238(2) CAA2001
The VAT reclaimed needs to be taken to the capital allowances pool as though it were disposal proceeds received for the van.
You do this for the period in which the VAT is reclaimed, so you don't need to worry about adjusting any earlier years.
In practice, this way well give you a result identical to the treatment suggested above by seitler.
David