Sole trader purchased van on HP, I have recommend he registers for VAT to reclaim vat on van but also set up limited company.he is under threshold but al customers at VAT registered
he won’t be able to transfer van to LTD co and not charge VAT under TOGC rules because of HP agreements , is there any other solution?
Replies (1)
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Usually you would claim the entire input tax on the initial HP payment, as it is a supply of goods, not services. So, register the sole trader for VAT, and then do a TOGC.
If it is a lease, then you would need a different solution.