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Closure of business due to Covid

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Hi all - I'm looking for some advice. Just before Covodi hit I set up a limited company and purchased a piece of equipment valued at £15K funded by a directors loan from myself. I registered for VAT and claimed the VAT back. However due to Covid the business is no longer vialable in the near to long term future (travel & leisure industry). I intend to close the company down however I want to keep the equipment for myself. How do I go about doing this? The ltd co still owes me the loan (however no cash in the company). Is it possible for me to somehow buy the assest to offset the loan? 

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By Mr_awol
29th Jun 2020 15:20

It's almost certainly possible but don't forget to charge yourself VAT as appropriate 9or deregister the company prior to sale - but that will probably still entail paying some VAT back)

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By Paul Crowley
29th Jun 2020 15:24

Nothing more to add

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Replying to Mr_awol:
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By coronafailure
29th Jun 2020 15:38

This is where I am confused about how this works. The company has an asset worth £15K (that is purchased for £12K due to the VAT refund. Can I simply buy the asset from the company for £1?

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By ireallyshouldknowthisbut
29th Jun 2020 15:50

No. OMV.

Given the OMV is likely to be lower than the cost of the asset it should work out. You in essence pay the VAT back, and the buy back cancels out your loan.

You should probably take proper advice if you do not understand how VAT works as its not really something to muck about with for VAT on this sort of a sum.

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By Mr_awol
29th Jun 2020 15:59

What is the asset?

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By ireallyshouldknowthisbut
29th Jun 2020 16:55

You thinking an asset built for the conveyance of persons with a combustion engine? If that's your bet, I raise you a second hand one for added BIK and VAT (oops) issues, albeit they did say "equipment" in the opening sentence so I didn't like to assume it was one.

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Replying to ireallyshouldknowthisbut:
Hallerud at Easter
By DJKL
29th Jun 2020 17:37

Narrow Gauge Railway Engine, but you would not get much for £15k?

Shortages of tourists would certainly hurt this type of business.

The NG railway at Heatherslaw in Northumbria currently has a public appeal for support because of Covid, https://www.heatherslawlightrailway.co.uk/

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By Mr_awol
01st Jul 2020 14:39

Some sort of transportation system, had crossed my mind

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By CJaneH
29th Jun 2020 16:39

Whether the Company de-registers for VAT before or after disposal of asset Open Market Value is the value used.

A If de-registers first to calculate VAT repaid to HMRC
And then sale of assets to self.

B Sale by Company at Open Market Valuation to self charging VAT.

Given the value you will to get a third party to value the asset.

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By Paul Crowley
29th Jun 2020 18:43

Phone a local accountant. He will be able in a two way conversation to explain how VAT works together with the other issues that you have not realised are issues. And if you are struggling to understand re-explain there and then.
Your first response suggests you need help on basic issues. Most of us do a first meeting free.

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Lisa Thomas
By Insolvency Practitioner
30th Jun 2020 11:05

Are there other creditors apart from yourself?

If so the Company is insolvent and a transaction at an undervalue you will an illegal preference.

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By Paul Crowley
30th Jun 2020 11:51

One of which is HMRC, VAT type. Well known for their forgiving nature.
(for benefit of OP only)

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