If my Client wants to loan me equipment, but get me to buy it...

[DaveB]

I you buy it here and export it to HK for the client you need to be carefull about customs charges as well as VAT.

[pmeswani]

I need a MacBook for a project which has to run Mac/Windows. I'm working as a real business, hiring people and so on, not a contractor.

The client is happy to get me a MacBook to work on, but he's in HongKong so buying it in the UK is preferable to shipping it 1000s of miles. I imagine the plan is it will belong to him in theory i.e. he eventually gets it back. But he's quite keen for me to buy it and charge him, both for convenience and because I can theoretically claim the VAT back and make it cheaper.

But is that allowed? If my company buys a Mac and I charge him £1000 for "technical equipment" it belongs to my company. If I then give it to him at the end since it's unofficially a long-term loan, am I setting myself up for a fall if I ever get investigated and they ask where my Mac is?

Personally, I would buy the laptop and then charge the client cost of laptop (with or without the VAT) divided by the duration of the contract. If the client wants the laptop after you have finished the contract, then charge him the depreciated value of the laptop. Am thinking of the Dell model here but am unsure how it all really works.

Sorry if this is what everyone is suggesting.

[Platypus]

So you are saying if I BUY something in the UK and SELL outside the VAT zone, I can still claim back VAT?

e.g buy from Apple UK for £1000+VAT = £1150
sell for £1000 to a company in Hong Kong
claim back VAT of £150 from HMRC (I am VAT registered)

That is my understanding, yes.
This page seems to confirm it.

The place of supply is the place where something that you have supplied is liable to VAT. With goods, the place of supply is usually where your customer took delivery of them.

However it looks to me as though you ought to be certain to export the goods when the job is finished.

The advice on this forum regarding VAT always seem to be to phone the VAT folks as they are most helpful. That seems very sensible in this case where the goods aren't being exported immediately.

[d000hg]

So you are saying if I BUY something in the UK and SELL outside the VAT zone, I can still claim back VAT?

e.g buy from Apple UK for £1000+VAT = £1150
sell for £1000 to a company in Hong Kong
claim back VAT of £150 from HMRC (I am VAT registered)

[Platypus]

If I sell it to him and he's outside a VAT zone, VAT is still payable since I'm in the UK?

That's certainly not my understanding. Supplies outside the VAT zone are VAT-free.

[MPwannadecentincome]

That works, but I think he's after paying the VAT-free price. If I sell it to him and he's outside a VAT zone, VAT is still payable since I'm in the UK?

So unless he wants me to keep the Mac the VAT has to be paid in some way, right? If I keep it and just charge him it in expenses, that would be OK but now he can't have it as it belongs to me.

I think if the answer is not on HMRC's website that is a question for the accountant!

[d000hg]

Its no different to PC world selling your company a PC.

YourCo buys the Mac from PC World (say) for £1000 + VAT = £1,150
YourCo claims the £150 back from the VATman
YourCo cost = £1,000

You sell the Mac to your client for £1000 + VAT = £1,150
YourCo gives the VATman £150
YourCo profit = £0

YourCo does not own the Mac, it has bought and sold it, same as PCWorld.
At the end of the gig, return the Mac to its owner (your client).

Or am I missing something?

That works, but I think he's after paying the VAT-free price. If I sell it to him and he's outside a VAT zone, VAT is still payable since I'm in the UK?

So unless he wants me to keep the Mac the VAT has to be paid in some way, right? If I keep it and just charge him it in expenses, that would be OK but now he can't have it as it belongs to me.

[tim123]

But is that allowed? If my company buys a Mac and I charge him £1000 for "technical equipment" it belongs to my company.

Why would you think that, "you paying for it", you charging him for it" leads to "you owning it".

As the joke goes, "choose two".

tim

[MPwannadecentincome]

Its no different to PC world selling your company a PC.

YourCo buys the Mac from PC World (say) for £1000 + VAT = £1,150
YourCo claims the £150 back from the VATman
YourCo cost = £1,000

You sell the Mac to your client for £1000 + VAT = £1,150
YourCo gives the VATman £150
YourCo profit = £0

YourCo does not own the Mac, it has bought and sold it, same as PCWorld.
At the end of the gig, return the Mac to its owner (your client).

Or am I missing something?

It is different - PC World would make a profit!

Also, what other big companies do in this situation is put an admin / handling charge on top!

[Archangel]

Its no different to PC world selling your company a PC.

YourCo buys the Mac from PC World (say) for £1000 + VAT = £1,150
YourCo claims the £150 back from the VATman
YourCo cost = £1,000

You sell the Mac to your client for £1000 + VAT = £1,150
YourCo gives the VATman £150
YourCo profit = £0

YourCo does not own the Mac, it has bought and sold it, same as PCWorld.
At the end of the gig, return the Mac to its owner (your client).

Or am I missing something?

[MPwannadecentincome]

I'm working as a real business, hiring people and so on, not a contractor.

Its interesting that you are using a contractors forum for business questions, perhaps there are no other forums like this and highlights the need for one?

[MPwannadecentincome]

It should be simple, draw up a contract with the customer selling him the mac, delivery date to be specified, subject to delivery charges applicable at the time, and raise an invoice for the corresponding amount.

If an auditor comes along show him the invoice and the contract.

[Spacecadet]

Buy it, then immediately sell it to him... it should be a simple matter of buying goods then selling goods, many businesses do this.

Do not claim the laptop as an expense from the client, as it is a sale of goods not an expense, probably simpler to invoice for it seperately from your usual billing.

Once the laptop sale to the HK client has been agreed then you can treat it as his property and if he wants you to use it - so be it.

at the end of the contract, it will have to be either shipped back, or if he doesn't want the hassle then you've got yourself a free macbook

[d000hg]

I need a MacBook for a project which has to run Mac/Windows. I'm working as a real business, hiring people and so on, not a contractor.

The client is happy to get me a MacBook to work on, but he's in HongKong so buying it in the UK is preferable to shipping it 1000s of miles. I imagine the plan is it will belong to him in theory i.e. he eventually gets it back. But he's quite keen for me to buy it and charge him, both for convenience and because I can theoretically claim the VAT back and make it cheaper.

But is that allowed? If my company buys a Mac and I charge him £1000 for "technical equipment" it belongs to my company. If I then give it to him at the end since it's unofficially a long-term loan, am I setting myself up for a fall if I ever get investigated and they ask where my Mac is?