I've just finished a pre reg and one of the things I wanted to include was the Company van, as there is quite a lot of VAT on it. Unfortunately it isn't a proper VAT receipt, it's just been written in on a sales enquiry/vehicle appraisal form. I contacted the van company today but he said its too far back to find (2.5 years) so I'm assuming that without it, he won't be able to claim the VAT?
Also (and this is mainly me just confirming really am I right in believing that, if it's just in his name, rather than the Company name, it wouldn't have been claimable even with a proper VAT invoice anyway?
Worth a punt, John? Maybe just explain to the client that he may have issues in an investigation, but I imagine that if the VAT is listed on the form and the bank/loans agree to the gross, you have a pretty good argument that the VAT was indeed charged. There is some scope to argue also that whilst its in the Director name, the van is a company asset - everything is there to prove that is being treated that way, and VAT would be charged if you sold it... this all assuming that van was purchased in company lifetime, not as sole trader.. otherwise I don't think there is a claim.
Would you have to consider the the current value of the van for VAT purposes though, because it has been used to make non vatable supplies? (I know the rules changed in Jan11 but have never had the need to look these over properly, so it may be that full VAT is now allowable - might be worth a look over, if you haven't confirmed that already)
-- Edited by FoxAccountancyServices on Tuesday 16th of December 2014 01:54:19 PM
Worth a punt, John? Maybe just explain to the client that he may have issues in an investigation, but I imagine that if the VAT is listed on the form and the bank/loans agree to the gross, you have a pretty good argument that the VAT was indeed charged. There is some scope to argue also that whilst its in the Director name, the van is a company asset - everything is there to prove that is being treated that way, and VAT would be charged if you sold it... this all assuming that van was purchased in company lifetime, not as sole trader.. otherwise I don't think there is a claim.
Would you have to consider the the current value of the van for VAT purposes though, because it has been used to make non vatable supplies? (I know the rules changed in Jan11 but have never had the need to look these over properly, so it may be that full VAT is now allowable - might be worth a look over, if you haven't confirmed that already)
-- Edited by FoxAccountancyServices on Tuesday 16th of December 2014 01:54:19 PM
Thanks Michelle, your reasoning makes sense and all the documentation is there to support it. He's been incorporated since day one and won't be affected by the exempt supplies rule, as far as I can tell.
At the time of the original purchase, had the company been incorporated, and did the company actually purchase the van? If not, then the supply was to the Director as a sole trader, not to the company. Input tax would therefore not be allowed.
My blog post explains in a bit more detail - www.accountingweb.co.uk/blog-post/claiming-input-tax-pre-registration
Yes, the company had been incorporated a couple of months when he bought the van. It was paid for on a company debit card and is in the accounts as a fixed asset. I think it was just an oversight that it was in his name rather than the company name, as it was sign written at the time and is still in use today.
