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Effects on a business when it deregisters for VAT
KEY POINTS
- Complications can arise when VAT rules relating to specific situations overlap.
- Sale proceeds of goods are VAT exempt if an input tax block applied on first purchase.
- Output tax will apply where input tax was claimed on an asset under the flat rate scheme.
- There are exemptions to the rule that output tax is chargeable on stock and assets when a business deregisters.
- Remember that an option to tax a property does not end on the deregistration of a business.
It is quite rare for respondents to reader queries in Taxation to give conflicting answers but this happened a few weeks ago in replies from Joe 90 and Miles to FRS problems.
They disagreed about whether output tax was due on fixed asset sales made by...
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