Capital Allowance under Flat Rate VAT scheme

Didn't find your answer?

Mr. A recently purchased an asset that meets the definition of capital assets as per BIM31585 for £1000 + 200(VAT). Now, when we wants to claim capital allowance on the asset. Which among the following costs will get capital allowance? 

a) £1000         b)1200

My understanding is that if Mr. A reclaims VAT, the Net value of £1,000 will be used. However, if he doesn't claim back VAT, the grosss value of £1,200 will be applicable. 

I'd appreciate if anyone could confirm this!

Replies (6)

Please login or register to join the discussion.

Replying to Wanderer:
avatar
By tax_query
07th Feb 2024 11:54

BIM31585 - Value Added Tax: flat rate schemes
Under flat rate VAT scheme, VAT on the purchase of capital assets exceeding £2,000 (on a single purchase) can be claimed back.

Thanks (0)
Replying to tax_query:
avatar
By Wanderer
07th Feb 2024 12:18

Yes but, no but, £1,000 is less than £2,000. You really should engage with an accountant.

Oh and it's REALLY BAD FORM to change your question after someone has posted an answer.

Thanks (0)
Replying to Wanderer:
avatar
By tax_query
07th Feb 2024 12:36

I'm sorry. I thought editing the post would be helpful for future readers. and I screwed up again by writing £1,000 instead of something higher than £2,000. Thanks for pointing it out! Thanks for the reply

Thanks (0)
Stepurhan
By stepurhan
07th Feb 2024 13:18

Editing your post is not helpful for future readers, because it will make the responses already arising no longer make sense.

This also appears to be a hypothetical question (given you admit to having picked the numbers out of thin air). If it was a complex question then it might have some merit for discussion, but this is a pretty basic question. Therefore you are either a student, and should say as much in your question, or someone woefully unprepared to deal with tax matters. Either way, go back to your tutor/hire an accountant is the most appropriate answer.

Thanks (0)
avatar
By FactChecker
07th Feb 2024 13:20

Instead of hoping that someone is going to dive into the murky waters and pull you out every time you call for help ... would it not be a better idea to appoint someone who can advise you (amongst other things) on how to avoid falling in?

Thanks (1)