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15 December 2020
VAT treatment of wine purchases.
I act for a client who is VAT registered as a sole trader. He buys and sells goods where there is a big profit to be made – his friends nicknamed him Arthur after the TV character Arthur Daley. He has the chance to buy some high-quality vintage wine from a wealthy businessman who is looking to decrease the stock in his wine cellar. My client plans to do three things with the wine during the festive season:
- he is going to sell 80% of the bottles on his website for a profit;
- he will donate 10% of the stock to local charities for use as future raffle prizes or auction items; and
- he will give 10% away to family and friends as Christmas presents.
I understand from the landlord at my local pub that he can use the margin scheme to declare VAT on the sales – but this...
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