Hi, Just confirming that what i believe is true:
Client is registering for VAT after a few years in business. He has a laptop and various other capitalised assets and wants to reclaim the VAT on them. They are all still in use in the business.
Am I right in thinking that since the whole amount was capitalised and AIA claimed, that when the VAT is reclaimed we have to treat the VAT element as a disposal of assets and pay a balancing charge?
thanks in advance
Replies (2)
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How many is "a few" ?
And how long since those assets were bought ?
You treat the VAT as a part disposal. Whether it creates a balancing charge or not will depend on whether there's anything left in the pool.