MyCIMA

Charging VAT on sale of fixed assets

Replies : 4
Keywords: fixed assets, Tax, vat

Question asked by:

Anonymous - view profile

A member has sent us the following query.  Can anyone help with this, please?  We could not find a specific answer. 

"We are a UK manufacturing company due to close next year, so we will have some fixed assets we are going to try and sell. Am I correct in thinking we would not charge VAT on these assets?"

Charging VAT on sale of fixed assets

As you will appreciate CIMA is unable to give tax advice.  Unfortunately I could not find a specific answer to your question on the HMRC website, but there is a section which covers “Closing or selling your business and VAT registration” which may be of interest.  This information can be found at: 

http://www.hmrc.gov.uk/vat/managing/change/close-sell.htm

You may be able to obtain further assistance by contacting HMRC’s VAT, Customs and Excise helpline, details of which can be found at:

http://search2.hmrc.gov.uk/kbroker/hmrc/contactus/search.ladv?sr=0&as=1&cs=ISO-8859-1&sc=hmrc&sf=&sm=0&nh=50&ha=34&tx0=67&fl0=contactid:&tx1=&raction=view

I hope this helps. 

Bill Haskins, TIS

Charging VAT on sale of fixed assets

Hi You dont have to charge VAT on asset disposals if you are disposing of assets that are not part of your normal trade i.e. you are selling off company cars but you are a food company etc. If you are a fleet company or alike then you already have a special VAT status which means you are obliged to charge (but can also reclaim) VAT on second hand vehicles etc. Bear in mind though that if you are selling your assets to a vat reg company it doesnt matter if you charge VAT or not as they will just reclaim it. If you are not certain then you should phone HMR&C with the details of your query. Before they are able to answer you, they will need your VAT reg info as well as your company name. Dont bother with the HMR&C website as it hardly ever has specific enough answers to questions its always best and speak to an advisor in person. If you are still worried, you can always ask HMR&C to put in writing what they advise you.

Charging VAT on sale of fixed assets..

this should say you DO have to charge VAT on sale of fixed assets. My bad - typo!!

VAT on Company Cars

I don't think you charge VAT on company cars? As HM&RC don't allow you to claim VAT at time or purchase then you don't charge at time of sale!