Margin scheme on goods appropriated to stock

[Generix]

This also avoids the debates around "market value".

An item may be acquired at auction for £10, and then sold to an unsuspecting member of the public for £100. What is the market value for appropriation to stock?

Just so we're clear (all the stuff re other taxes went WAAAAY over my head)

- If the person is selling them in a non-business manner - not within scope of VAT

- If person is selling them in a business manner - can be sold as margin scheme providing original purchase price can be proved (and subject to the other strict record keeping requirements being met)

- If a company sells them - can be sold as margin scheme based on purchase price from individual - however if this was distortively high/low HMRC may challenge.

Therefore, taking VAT in isolation for old stocks, best bet is to sell as non-business.

For new stocks incorporate a business and sell under margin scheme.

(best to keep new stocks within a Ltd so that HMRC can't argue that old stocks were also part of a business - if you get me?)

I assume you were clear anyway ;p

[Incredulum]

Thanks, all clear.

What is VAT implication of commencing business outside company and approporiating them to stock, but not being VAT registered. Then to incorporate business transferring assets in exchange for shares or on loan account, when the value of assets transferred is take you over the registration threshold.

[Generix]

Thanks, all clear.

What is VAT implication of commencing business outside company and approporiating them to stock, but not being VAT registered. Then to incorporate business transferring assets in exchange for shares or on loan account, when the value of assets transferred is take you over the registration threshold.

Implications on indiv are: If passing the VAT threshold on the 'business' sales - then need to VAT register (duh ;p). Little chance of 2nd hand margin scheme being used for old stocks.

If indiv is VAT registered then output VAT due on sale of goods to ltd co - MV or value of shares being consideration. Input tax recoverable by Ltd Co.

Ltd co can sell under margin scheme. Issue of shares /loan should be incidental to business therefore no PE implications.

Think that pretty much sums it up? Seems pretty simple.