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06 August 2019
Reclaiming VAT on HP asset bought by director
My client is a director who purchased an excavator bought on hire purchase. I have the VAT invoice issued by the finance company but this shows the director’s name only.
My questions are as follows.
- Can a newly VAT registered business reclaim the VAT on this item?
- What are the other options to reclaim the VAT in this case?
- Should I register the director for VAT voluntarily as he was trading as a sole trader before anyway?
- Is the sole trader allowed to invoice his own company including VAT as the revenue generated by the rental of the asset is invoiced by the company to another contractor?
I hope that Taxation readers can advise.
Query 19 406– Buyer.
Reply by Gardener
VAT pre-registration relief rule under SI 1995/2518 might be applicable.
The sequence of events is not clear in the query. Was the excavator bought while the director was still a sole trader or after...
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