Please could I have some advice /second opinion. A partially exempt client has purchased some equipment. The value of the purchase is below the capital goods scheme thresholds. Do I allocate the VAT to the normal taxable, exempt and residual categories depending on how the equipment is used. i.e if it is used only for generating taxable sales can all of the input VAT be claimed, whereas if it was only used in relation to exempt sales no input VAT would be recovable. Or is there another treatment?
if the equipment is subsequently sold, how is the sale treated in terms of what VAT has to be paid to HMRC.
I have tried reading the VAT notices, but have managed to get myself somewhat confused. Any help is much appreciated.