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Sam, Accountant
Category: Tax
Satisfied Customers: 14153
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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hi, In April this year changed from a sole trader to a limited

Customer Question

hi, In April this year changed from a sole trader to a limited company. My work involves a lot of working away, in 2007 I bought a new caravan to use instead of hotels / b&b. in July I traded it in for a new replacement, which I assume would be as an employee giving an asset to the new limited company.
my understanding is that as a sole trader the vat responsibility is mine; as a limited company the vat responsibility is the companies
the new caravan has been bought through the company
HMRC say that I should have paid a £1,000 vat, but my last return as a sole trader was in April, and as an employee I wouldn't have the vat liability, are they right to have adjusted my first limited company return to show the £1,000 vat ?
many thanks,
M Toon
Submitted: 3 years ago.
Category: Tax
Expert:  Sam replied 3 years ago.
Thanks for your question, I am Sam and I am one of the UK tax experts here on Just Answer.
You are right that as a sole trader the VAT comes out of your profits, but the same applies when a limited company (but its just that the VAT bill the comes from the company profits)
Have you submitted your first VAT return as a limited company ?
Did you inform HMRC VAT that the legal entity of the business had changed? AS you should have informed them on form VAT484, and you would have had the choice to carry on with the same VAT registration number.
This being the case, I am a little confused by your question, as the VAT would have been due regardless - perhaps you could expand if my response does not cover the question you are seeking an answer to.