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31 July 2012
A client company uses the VAT flat-rate scheme. It has recently purchased a mobile home, paying VAT under a margin scheme, but wishes to sell or transfer this asset to the company director
Our client is a company which uses the flat-rate scheme for accounting for VAT. It has purchased a mobile home for approximately £125 000.
The seller has issued a VAT margin scheme invoice and there is consequently no input tax for my client.
The company now wishes to transfer or sell the mobile home to a director and there are two points on which we would welcome advice.
- A trader using the flat rate scheme and a margin scheme for certain goods must apply the flat rate scheme percentage to the full selling price and not merely the margin. Do readers consider that this is correct?
- The sale/transfer of the mobile home to the director is subject to the flat rate scheme percentage. Do readers agree?
The only way around this which we can think of is for the company to drop out...
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