Readers’ forum: Group VAT registration and partial exemption

One of my clients has a VAT group registration in place which consists of two limited companies one trades as a funeral business and the other company trades from six florist shops. To add to the portfolio of businesses my client has bought a coffee shop – the assets and income will be included in the same company as the florist activity.

There will be no VAT charged by the seller under the transfer of going concern (TOGC) rules but the purchase includes three computers with a value of £20 000 which will only be used by the funeral business. The florist will make a hire charge of £3 000 a year to the funeral business for the use of the computers which will not be subject to VAT as an intra-group supply.

However are there any input tax issues with the purchase...