VAT on Disposal of asset after De Registration

amysmum Registered Posts: 11 Regular contributor ⭐ 😼 ⭐
A director of a small limited company is deregistering for VAT and intends to close down the company next year. There will be various assets remaining. Can he remove some of these assets to offset his directors loan?
Also he may want to sell the company van to himself before he finally winds up the company - if the company has deregisted can he purchase the van without paying VAT to the company, i.e. does the company still have to charge him VAT on this disposal of an asset. The company obviously reclaimed the VaT paid 2 years ago when the van was originally purchased. The van is now worth around £5000. Thanks


  • JoeBrough5
    JoeBrough5 Registered Posts: 1
    If your client deregisters for VAT he will have to account for the VAT on any stocks and assets held at the date of deregistration if the gross value of the assets (i.e VAT inclusive value) is more than £6000. The assets are valued at the price you would expect to pay for them in their current condition. If the van is the only asset on hand then no VAT will be due. There are certain items you can exclude from the gross value calculation and these are detailed in VAT Notice 700/11 along with the other detailed rules which you will need to consider.

    If the company, once deregistered then sells the van to the shareholder then the disposal proceeds will not be brought in to account in determining whether the VAT registration threshold has subsequently been breached and VAT will not be charged by the company on the sale to the director.

    The company would also bring a disposal value in to account when producing the capital allowances computation.
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