A VAT question

[Wscad]

Pre Covid, I was a sole trader, self employed, vat registered.

Covid came spring 2020. My accountant said “wscad I’m closing my business and hoofing off to live in Portugal. All your affairs with HMRC are in order”

I looked in the shoe box.... there was sufficient dosh there so I said to my accountant....close my business down and de register my VAT obligations

All done and dusted

Move on to 2025, I no longer need a tranny van. What, if any, are my vat requirements when I sell it?

[wheelnut]

Firstly, i’m not an accountant so take this at your risk, but my feeling is any assets you claimed relief on should have been accounted for on your final vat return. Ie, you would sell the van to yourself and pay the output vat at that point. Your accountant may well have done this.

I think there is a minimum though below which the hmrc don't care, 1k rings a bell, so if you’re getting less than 6k for the van then don’t worry about it.

[mangocrazy]

If your accountant was doing his job right the value of the Tranny van should have been written down over 3 or 5 years (can't remember which), so it should be effectively off the books now.

[wheelnut]

If your accountant was doing his job right the value of the Tranny van should have been written down over 3 or 5 years (can't remember which), so it should be effectively off the books now.

I think while that would be true for accounting purposes, it wouldn’t be the case for vat/tax purposes.

The van should/would have been disposed of at the wind up of the business. It has to be sold at a fair(ish) market value and the amount from that would be introduced into taxable profit along with the vat element. To be fair, I’m not sure if the sole trader aspect affects that though.

My bike is owned by my business - unfortunately I can’t just sell it to myself for £1 and dodge any vat/income tax obligations.

[Pirahna]

How old is the van? They only carry VAT for seven years.

If it's newer you have a couple off options. Either sell it and pretend nothing happened, or sell it and get in touch with HMRC and try to pay them money. I know what I'd do.

[wheelnut]

How old is the van? They only carry VAT for seven years.

That’s a new one to me - have you got a link to the legislation?

[Pirahna]

How old is the van? They only carry VAT for seven years.

That’s a new one to me - have you got a link to the legislation?

No to the link and a quick Google suggests it might take some time to find. Taipan used to be a motor trader, maybe he'll know more, or phone your friendly local van dealer.

[Scud]

My thoughts are as you are no longer vat registered you can’t collect vat on the sale.
I’d be selling for cash and keeping quiet.

[Wscad]

Many thanks for all your replies. The van is 10 years old now.
I heard on the grapevine Covid got my accountant and is no longer with us

I have heard nothing from HMRC in more than 5 years.

I have been told that in the big scheme of things, in the tax man eyes, I’m just a small spud. The tax man has bigger fish to fry

I’ve been offered 4K for the van. As suggested, I think I’ll flog it and keep my head down

[Mr. Dazzle]

I have been told that in the big scheme of things, in the tax man eyes, I’m just a small spud. The tax man has bigger fish to fry

FWIW I've heard the opposite - small spuds are prosecuted because they're easy! The cases are simple and proof is easy to obtain. Low hanging fruit.

[Mussels]

I have been told that in the big scheme of things, in the tax man eyes, I’m just a small spud. The tax man has bigger fish to fry

FWIW I've heard the opposite - small spuds are prosecuted because they're easy! The cases are simple and proof is easy to obtain. Low hanging fruit.

Yes and no, they like easy wins best but only if it's worth their time. If it costs £500 to recover £400 in tax they won't bother unless making an example of someone.