VAT - Capital goods scheme

Question 1

What would a relevant scenario be for the Capital Goods Scheme?

Answer 1

VAT registered entity purchases a building or computer

Question 2

What are the conditions for buildings?

Answer 2

Spent > £250,000

Question 3

What are the conditions for a computer?

Answer 3

Spent > £50,000

Question 4

What is the year 1 Calculation?

Answer 4

Total Input VAT x Business use % original

Question 5

What is the subsequent adjustment called

Answer 5

The Annual adjustment

Question 6

What are the subsequent adjustments dependent on?

Answer 6

Whether there has been a change in business use %

Question 7

What is the subsequent adjustment formula?

Answer 7

1 / (5 or 10) * (BU% Now - BU% Original) * Total input VAT

Question 8

What is the sales adjustment formula?

Answer 8

Years left on Capital goods scheme / (5 or 10) * (100% or 0% - B.U % Original) * Total Input VAT

Question 9

On the Sales adjustment formula, when is 100% used and when is 0% used?

Answer 9

100% is used if VAT is charged on disposal
0% is used if VAT is not charged on disposal

Question 10

How long does the capital goods scheme last for buildings

Answer 10

10 Years

Question 11

How long does the capital goods scheme last for computers

Answer 11

5 Years