Reply to: Sell my Computer to LTD company

[THEPUMA]

Wrong, strictly speaking. As I said earlier, this is only true if you bought the laptop purely for the business in advance of setting up the business: effectively the transaction is then an expense claim. Nothing wrong with that of course, and Hector would have a really fun time proving a recently acquired laptop was not bought on that basis - one that's two years old though...

Otherwise you are simply selling something you own already to a limited company and unless you are registered for VAT yourself, there is no VAT in the sale, hence nothing to reclaim.

Sorry I don't mean to pick on you Mal, really I don't!

But you are allowed to reclaim VAT on assets bought for your business within 3 years of VAT registration which you have not sold at the date of registration.

I think the question is whether the asset is used in the business once it has started rather than the original intention when the asset was purchased as otherwise the 3 year allowance seems particularly generous.

[Archangel]

Are you sure that it is 12% for the first year. I thought its 13% for every year.

Regards,
Goodmans

See section 4.5 Reduction of 1% for new VAT registrations

http://customs.hmrc.gov.uk/channelsP...ent#P145_12610

[Platypus]

Wrong, strictly speaking. As I said earlier, this is only true if you bought the laptop purely for the business in advance of setting up the business: effectively the transaction is then an expense claim. Nothing wrong with that of course, and Hector would have a really fun time proving a recently acquired laptop was not bought on that basis - one that's two years old though...

Otherwise you are simply selling something you own already to a limited company and unless you are registered for VAT yourself, there is no VAT in the sale, hence nothing to reclaim.

Yes I agree that a laptop bought more than a few months beforehand would be a problem. You are quite correct.

[malvolio]

Essentially, the company purchased the laptop but you paid for it. The company reimburses you what you paid, then reclaims the VAT. No problem at all. This is how a real business works.

Wrong, strictly speaking. As I said earlier, this is only true if you bought the laptop purely for the business in advance of setting up the business: effectively the transaction is then an expense claim. Nothing wrong with that of course, and Hector would have a really fun time proving a recently acquired laptop was not bought on that basis - one that's two years old though...

Otherwise you are simply selling something you own already to a limited company and unless you are registered for VAT yourself, there is no VAT in the sale, hence nothing to reclaim.

[Platypus]

One more small doubt. What about the VAT that I have paid for my laptop. Will I be able to claim it as a LTD company?. As a LTD company I cant claim it from myself as a individual person. I dont know its bit tricky to my mind.

Me and my wife are using this laptop for complete business purpose because I already got one more computer for my home purpose.

Essentially, the company purchased the laptop but you paid for it. The company reimburses you what you paid, then reclaims the VAT. No problem at all. This is how a real business works.

[Platypus]

You'd have a hard time jusifying it if HMRC found it in the kids bedroom or it was a gaming PC. If you really mean "i want a second pc for m family and I want to get the VAT back" then the answer is no.

And how would HMRC find this out? What a ridiculous comment.

A second PC for a real business is hardly an issue, is it?

[xoggoth]

Not strictly relevant but you can also claim capital allowances on privately owned items used for business and do not have to transfer it. Do a search on HMRC website.

[Goodmans]

Thanks a lot guys. I am not bothered to claim the VAT on the computer that I am selling to my LTD company dont want to confuse Tax man.

Yes. I am registered to VAT. I am an IT consultant. And my company is registered under IT category.

Are you sure that it is 12% for the first year. I thought its 13% for every year.

Regards,
Goodmans

[malvolio]

Thanks for your replies,

One more small doubt. What about the VAT that I have paid for my laptop. Will I be able to claim it as a LTD company?. As a LTD company I cant claim it from myself as a individual person. I dont know its bit tricky to my mind.

Me and my wife are using this laptop for complete business purpose because I already got one more computer for my home purpose.

Thanks

You (personally) will not have charged YourCo VAT on the sale, so how can you recover it? You can reclaim the VAT only if the laptop was originally bought solely for company use. And strictly speaking, if you are selling YourCo an asset you bought personally you should take off the VAT from the price you paid originally, although that is another minor detail.

But you're looking at £100 - why risk bending the rules for such a trivial amount?

[Archangel]

Thanks for your replies,

One more small doubt. What about the VAT that I have paid for my laptop. Will I be able to claim it as a LTD company?. As a LTD company I cant claim it from myself as a individual person. I dont know its bit tricky to my mind.

Me and my wife are using this laptop for complete business purpose because I already got one more computer for my home purpose.

Thanks

You bought the Laptop for the company, so the VAT is claimable.
The company is not buying it off you.

You should probably register for Flat Rate Vat (unless you have lots of VAt inclusive purchases to make).

basically you charge the client (or agent as appropriate) 17.5% of your fees in VAT, but you only give the taxman say 13% (12% in first year) ( if an IT provider, rates vary by sector) of the gross amount. Your company pockets this difference and you receive it after paying corp tax on it. You cannot however claim any VAT back (unless you make a capital purchase over £2,000, then you can claim the VAT back).

An simple example:

Your company charges for a week on £400 a day:

Charge the Client or Agent £400 * 5 = £2000
VAT on £2000 = £350
Gross charged £2350

Pay to VATman £2350 * 12% = £282

Difference pocketed £68

Multiplied by 46 weeks worked = £3128

Not a bad return for doing very little (other than registering).

HTH

[Archangel]

Sorry is there something wrong with the Phrase "self-employed contractor" . Please correct me if I am wrong.

Rgds,

The term self employed can be confusing.

Most folk on here running limited companies consider themselves Employees of their limited company. (although unless they have a contract of employment they are actaully "office holders")

Self Employed contractors usually have no need for a limited company, but are rare because Agents will not usually deal with the self employed. Clients are usually reticent with dealing with the self employed in case they get hit for unpaid tax & NI.


(there are some folk who are self employed and work as sole traders for their limited company, but this is too complicated to cover in this reply)

HTH

[Goodmans]

Thanks for your replies.

Thanks for your replies,

One more small doubt. What about the VAT that I have paid for my laptop. Will I be able to claim it as a LTD company?. As a LTD company I cant claim it from myself as a individual person. I dont know its bit tricky to my mind.

Me and my wife are using this laptop for complete business purpose because I already got one more computer for my home purpose.

Thanks

[Ruprect]

Well, sort of. You should knock a bit off the price since it isn't new, but no more than £50 or so; it won't havbe lost much value in three months.

As for anything you buy as the company, the only rule is that it should be "wholly and exclusively" for the use of the business (so no plasma screen TVs for the bedroom). It's your business, you decide how it spends its funds. Just don't ever mix up company money and assets with your money and assets...

Only for the office.

[Ardesco]

Yep. Just make sure it is an office PC.

You'd have a hard time jusifying it if HMRC found it in the kids bedroom or it was a gaming PC. If you really mean "i want a second pc for m family and I want to get the VAT back" then the answer is no.

The joys of running a GSP as Plan B. I have to be able to log onto all the servers to check everything is working correctly, therefore my business machine needs to be capable of running certain games, and they also need to be installed

[Sockpuppet]

And I want to buy one more new computer on Company's name now. Can I keep 2 computers at a time? Laptop is for mobile purposes and Business PC is for non-mobile purposes at office?

Yep. Just make sure it is an office PC.

You'd have a hard time jusifying it if HMRC found it in the kids bedroom or it was a gaming PC. If you really mean "i want a second pc for m family and I want to get the VAT back" then the answer is no.