VAT registration problem
One of my clients trades in second hand goods and is not VAT registered because his annual turnover is less than £85 000.
However I am worried that he might have scored an own goal which is an appropriate phrase because the potential problem relates to signed sports photographs which he purchased for £12 000 as a special deal at a liquidation sale but then proceeded to donate to a variety of worthwhile causes mainly to be used as auction items at fundraising dinners for charity. They were gifted over a six-month period after they were purchased in July 2021. His motives were philanthropic.
My client’s motive for putting the purchase through his business records was because he thought it would be an allowable cost against his sales to reduce his corporation tax liability as he trades as a limited company.
I understand...
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