Jackie Yarrow provides a practical guide to the operation of the Capital Goods Scheme
The Capital Goods Scheme (CGS) affects any business that spends capital sums on either land and buildings or computer equipment where the amount spent exceeds £250k (VAT-exclusive) or £50k (VAT-exclusive) respectively and the assets are for business use. Such assets are referred to as capital items.
It is a scheme that was introduced with effect from 1 April 1990 to ensure that where VAT is recovered on significant costs the input tax recovery is only permanent to the extent that the assets continue to be used for a taxable purpose and are in use for that or any other taxable purpose for a period of at least ten years for land and buildings and five years for computers.
Any change of use within that time period may result in a potential claw back...
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Jackie Yarrow provides a practical guide to the operation of the Capital Goods Scheme
The Capital Goods Scheme (CGS) affects any business that spends capital sums on either land and buildings or computer equipment where the amount spent exceeds £250k (VAT-exclusive) or £50k (VAT-exclusive) respectively and the assets are for business use. Such assets are referred to as capital items.
It is a scheme that was introduced with effect from 1 April 1990 to ensure that where VAT is recovered on significant costs the input tax recovery is only permanent to the extent that the assets continue to be used for a taxable purpose and are in use for that or any other taxable purpose for a period of at least ten years for land and buildings and five years for computers.
Any change of use within that time period may result in a potential claw back...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
