I have a limited company client who did the following:
1) Bought a double - invoice in company name and claimed back full VAT on the double cab.
2) During the year, the client has identified that the vehicle was actually a personal vehicle of the director and should not be in the company name and that it should be in the individuals name. It has been advised that the usage is 7/7 days personal with very minimal business usage which can't be accurately assessed.
So is the correct method to adjust the VAT claimed on the vehicle to block it as there is no / little business usage? And step 2 then sell the vehicle to the director - on this sale would VAT be chargeable if there has been no VAT claimed?
or can the expense simply be allocated as a personal expense to drawings (as there is a huge amount owed to the director) ?