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I have a client who used the VAT flat rate scheme until he deregistered for VAT on 31 May 2012. He deregistered on the basis that his taxable sales in the next 12 months will be less than £75 000.
However a recent VAT visit has identified that at the date of deregistration he had two business cars on his balance sheet worth £15 000 at market value and the officer has applied a 12% flat rate percentage to these assets on the basis of a deemed sale of assets taking place to the business owner.
The officer said that it is an acknowledged fact that the flat rate percentage applies to all business supplies including asset sales unless the income is outside the scope of VAT.
He also assessed my client for flat rate scheme tax on bank interest received for the past four...
