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Is VAT chargeable on sales of Assets

Is VAT chargeable on sales of Assets between associated companies

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I have a client who has a number of separate VAT registered companies, some Standard Accouting, some Cash Accounting. All the companies are VAT registered.

Company A buys commercial vehicles. Company A then sells the vehicles to Company B, whilst the vehicles are under finance agreements. When the finance agreement has been settled Company B then sells the vehicle to Company C. VAT was applied (and claimed) on the original purchase invoice to Company A.  Does VAT need to be applied to the inter company Invoices ?

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By paul.benny
05th Aug 2020 10:46


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By Wilson Philips
05th Aug 2020 11:49

Are the finance companies aware of what is going on? (I appreciate nothing to do with the original question)

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Replying to Wilson Philips:
By kenajcooper
05th Aug 2020 13:51

Yes - The finance arrangements are with Company B

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Replying to kenajcooper:
By stepurhan
05th Aug 2020 14:25

kenajcooper wrote:

Yes - The finance arrangements are with Company B

If the finance arrangements are with Company B, in what way is Company A buying them?

If Company B is actually buying them (which seems likely given where the finance arrangements are) is Company A simply supplying cash for deposits?

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By Paul Crowley
05th Aug 2020 13:00

Yes. But see Wilson above.

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By lionofludesch
05th Aug 2020 13:17

I vote yes.

But see Paul Crowley above.

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Hallerud at Easter
05th Aug 2020 14:29

I also believe yes but would ask:

1. Have these entitities considered a vat group re registration, if on point?

2. Why the convoluted first purchase by A who sells to B who takes out HP presumably using it to settle price to A? There is obviously a purpose behind this.

3. What is happening with AIA claims?

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