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Asset challenges

24 April 2012 / Neil Warren
Issue: 4350 / Categories: Comment & Analysis , VAT
NEIL WARREN considers the options available to a business that buys assets not wholly used for business purposes


  • Input tax apportionment.
  • Lennartz mechanism.
  • Output tax adjustment.
  • Fair and sensible result.

There are times in the world of tax when we suddenly identify a topic where our knowledge is not as hot as it should be … well I do anyway.

I recently found myself mentally muddying the waters over the input tax issues that apply when a business buys assets that are partly used for business purposes and partly for ‘other’ purposes i.e. non-business or private use.

In such times my strategy is to create a number of practical examples on a blank sheet of paper that include the areas I am confused about and work through them with the help of the legislation and HMRC guidance.

I persist with this approach until things are as clear...

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