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We are a vat registered company and have purchased an

Resolved Question:

We are a vat registered company and have purchased an expensive painting as an investment. Can we reclaim the input vat charged to us
Submitted: 3 months ago.
Category: Tax
Expert:  bigduckontax replied 3 months ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

Yes, the company can, but remember that when the painting is sold at some future, indeterminate time, the organisation will have to charge VAT to the buyer.

I do hope that I have been able to shed some light on this matter.

Customer: replied 3 months ago.
Thank you for responding so quickly. When I called HMRC they just kept on repeating to me is the painting necessary for your taxable supplies which of course it isn't as we are not an art dealer. However if we purchased the painting with the intention of selling it on at a later date I concur with your argument that we would have to charge output tax and therefore we should be allowed to reclaim the input VAT - is this argument acceptable should I be subject to a VAT inspection?
Expert:  bigduckontax replied 3 months ago.

I would certainly advocate that approach that in the long term sale is anticipated.

HMRC's argument would not survive sustained comment. Were the company, for example, to buy a building upon which VAT had been charged, then that input tax would be reclaimable.

VAT inspections these days are exceedingly rare.

bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3125
Experience: FCCA FCMA CGMA ACIS
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 3 months ago.

Thank you for your support.

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