Selling company laptop

[xara]

Had a search on this, including via Google, but couldn't find, though I'm sure it's been asked before. Anyway:

Can anyone advise about rules concerning selling a company laptop for which VAT has been claimed (and the remaining value offset against CT).

[cojak]

How old is it?

If it's over 3-4 years (can't remember which), depreciation may have taken it off your company's book anyway.

[Sockpuppet]

Had a search on this, including via Google, but couldn't find, though I'm sure it's been asked before. Anyway:

Can anyone advise about rules concerning selling a company laptop for which VAT has been claimed (and the remaining value offset against CT).

You need to charge VAT when you sell it and also put that towards the CT.

SO sell it for £200. VAT of £33.33 needs to be paid to tax man and the same again in extra CT.

[escapeUK]

Didnt it break out of warranty and was thrown away?

[xara]

You need to charge VAT when you sell it and also put that towards the CT.

SO sell it for £200. VAT of £33.33 needs to be paid to tax man and the same again in extra CT.

OK. So buy laptop for £2000. VAT is £400, CT offset roughly the same.

Sell at some point for £1200 (optimist speaking). VAT would be £240, CT similar.

I guess it's one way of keeping equipment somewhat up-to-date. Or am I missing something?

[stek]

You need to charge VAT when you sell it and also put that towards the CT.

SO sell it for £200. VAT of £33.33 needs to be paid to tax man and the same again in extra CT.

Even on FRS? Not being awkward, just don't know!

[Jessica@WhiteFieldTax]

Yes, the laptop counts towards vat flat rate turnover.

The proceeds are subject to corporation tax, either as revenue if you expensed the laptop, or more likely as proceeds in the equipment pool in your capital allowances, quite possibly creating a balancing charge if the pool is otherwise nil - two different treatments but similar results - if it sounds complicated, don't shoot the messenger

[Contreras]

Even on FRS? Not being awkward, just don't know!

It depends on whether or not VAT was reclaimed the on the original purchase.

The OP states that they reclaimed the purchase VAT so what Sockpuppet said is correct.

Note: even on FRS you can still reclaim VAT on individual capital purchases above £2k+VAT. But if the purchase price is below £2k then you can't claim the VAT and so then when you come to resell the item it's treated as FRS turnover.

[Wanderer]

If it's over 3-4 years (can't remember which), depreciation may have taken it off your company's book anyway.

Good point. Does anyone know what the time scale for depreciating an asset like this is?

[Sockpuppet]

Good point. Does anyone know what the time scale for depreciating an asset like this is?

Look in your accounts.