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VAt registartion pre reg VAT reclaim

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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

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By lionofludesch
29th Sep 2021 09:45

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.

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By harpsong
29th Sep 2021 10:04

The assets were all bought within the 4 years as allowed. AIA was claimed 100% on all of them so nothing in the pool. So a balancing charge of the full VAT amount.

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