Deregistering for VAT

Moobag

I have a client who has ceased to trade on the 31st March. He handed me his books yesterday and advised me of this. I need to deregister him for VAT, however in his last VAT return he bought a new Van and claimed the VAT, having not come across this before what should I do about this?

Makkusu

You'll need to account for any VAT on capital assets including company vehicles by adjusting the VAT return. Essentially, he'll have VAT due to HMRC based on this purchase.

You can value the van at the price you'd pay for it in its present condition (probably not that different from what he purchased it for).

If the total VAT due on the assets is less than £1,000 then he won't need to pay any VAT. So, assuming the Van (in addition to any other assets he's reclaimed VAT for) is valued at less than £6k, there are no VAT adjustments required.