A Ltd Co client in the marine sector has sold a rigid inflatable boat to another marine based company for £17k.
The boat was initially purchased in 2011 for £18k as a used boat with 'VAT paid'. This was before my time and I have not seen the records to confirm the VAT treatment but I am told that no VAT was charged/claimed as this was purchased from a private individual.
A Group structure was implemented some time later (again, before my time) and this boat was sold to the holding company along with several other assets for £1 so the second hand margin scheme does not appear to help (if it was ever an option).
What is the VAT position on this sale?
My client thinks that the 'VAT paid' status transfers to the purchasing company so no VAT should be charged on this sale.
A8 at the following link reads as though VAT should be charged:
Thanks in advance for your input.