So im a sole trader and in the coach and limo industry.
On the coach side its zero rated (as more than 10 passengers) so i claim back input vat 20% on any purchase and charge vat on any coach hires at 0%
For the limo (which only has 8 seats) i claim input VAT 20% but also charge 20% output.
Now i am basically changing from a sole trader to a ltd company so need to sell the assets from the sole trader to the ltd company (and as of yet i have not done any vat returns ever from the sole trader side, as it was only set up for VAT a few months ago and i need to do my first VAT return in the next week).
So im not sure which is correct here:
I claim back the input VAT as a sole trader at 20% but when i sell to the ltd company do i put the sale through as:
A. 0% on the coaches but 20% on the limo (as im zero rated or does this only apply to my actual sales to customers?)
B Or does it need to be 20% input and 20% output charge on both (as its a sale from sole trader to ltd and not a sale as in me charging a customer?)
Secondly if option B is correct I have owned 1 coach for 3 years, one for 2 years and the limo for a few months so do i:
A. Sell to the ltd company at the price i paid originally lets say it totals 100K so VAT on both sides will be 20% (£20K).
B Or do i sell at a reduced price as the vehicles are older so ie I claim back 20% of the 100K paid as a sole trader (£20k) but i charge less for example £80k to the ltd company (£16k in vat), meaning im up £4k, this is obviously the better option financially and im assuming the correct method as the vehicles will have reduced in value.
Any help would be appreciated as my accountant is not the most forethcoming with this info, and to be honest i think he wants to do whatever is easier for him rather than financially correct for me. I plan to change to a new accountant as soon as this is all dealt with, but need to stock with him for now.
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