VAT treatment query

Accounting
1

Hi,

We are VAT registered, and bought some equipment a while ago from a non-VAT registered seller. We did not reclaim VAT on the purchase.

If we were to sell this equipment (for less than we paid for it), should we add VAT to the sale price? In my naive mind we shouldn’t, because it’s already been paid and charging VAT on the sale would mean double VAT was paid.

But…I’m probably wrong!

Thanks in advance,
Iain

2

You cannot claim VAT on the original purchase from non-vat person ,
If you’re selling second-hand equipment you bought previously, then no VAT is charged on the sale. However, VAT will be due on the margin if you sell it at a profit.

3

Hi,

Thanks very much for your response. This is entriely in line with my understanding. Just to confirm, there was no VAT reclaim on the original purpose, from a non-VAT person, and the sale price was considerably lower than the purchase cost.

Thanks again,
Iain

4

Just make sure you keep all the correct records for margin scheme accounting. See here for details VAT margin schemes: Keeping records - GOV.UK.
Otherwise, you would have to charge VAT on the sale in the usual way.

5

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