Winks
Junior Member
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April 2016
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Tax & buying art, by Winks on May 28, 2017 21:07:30 GMT 1, What I thought may be good is if you used your limited company to buy art from the EU, you can get it vat free. B2B EU vat rules. But you still account for UK VAT on acquisition.
It's the reverse charge. You account for output vat on your vat return but you also claim input vat so it's a nil effect
What I thought may be good is if you used your limited company to buy art from the EU, you can get it vat free. B2B EU vat rules. But you still account for UK VAT on acquisition. It's the reverse charge. You account for output vat on your vat return but you also claim input vat so it's a nil effect
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Winks
Junior Member
Posts โข 2,774
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April 2016
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Tax & buying art, by Winks on May 28, 2017 21:16:29 GMT 1, ย ย Here's a true story. ย Someone I know went to buy some imported goods from a location in the UK. A building with storage. Four seperate ltd companies registered at the same address selling the same imported items and all owned by the same person. The four companies combined turnover is over the VAT threshold. The four companies individual turnover is below the VAT threshold.ย Non of the four companies paid any VAT. All fine until the get a visit from an officer. HMRC have the power to combine the turnover of businesses artificially separated to avoid the threshold.
When separate entities, i.e. Companies and separate bank accounts etc this is not easy for hmrc to do
ย ย Here's a true story. ย Someone I know went to buy some imported goods from a location in the UK. A building with storage. Four seperate ltd companies registered at the same address selling the same imported items and all owned by the same person. The four companies combined turnover is over the VAT threshold. The four companies individual turnover is below the VAT threshold.ย Non of the four companies paid any VAT. All fine until the get a visit from an officer. HMRC have the power to combine the turnover of businesses artificially separated to avoid the threshold. When separate entities, i.e. Companies and separate bank accounts etc this is not easy for hmrc to do
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Winks
Junior Member
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April 2016
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Tax & buying art, by Winks on May 28, 2017 21:39:45 GMT 1, It's the reverse charge. You account for output vat on your vat return but you also claim input vat so it's a nil effect Reverse charge is for services only
The vat that would have been charged on the purchase is included at 20% in box 4 of the vat return and in box 2 also. Therefore negated.
It's the reverse charge. You account for output vat on your vat return but you also claim input vat so it's a nil effect Reverse charge is for services only The vat that would have been charged on the purchase is included at 20% in box 4 of the vat return and in box 2 also. Therefore negated.
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Winks
Junior Member
Posts โข 2,774
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April 2016
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Tax & buying art, by Winks on May 28, 2017 22:24:16 GMT 1, The vat that would have been charged on the purchase is included at 20% in box 4 of the vat return and in box 2 also. Therefore negated. And then box 1 on sales. And if it's not purchased as business stock for resale you wouldn't recover on box 4.
No. box 2 and box 4.
The vat that would have been charged on the purchase is included at 20% in box 4 of the vat return and in box 2 also. Therefore negated. And then box 1 on sales. And if it's not purchased as business stock for resale you wouldn't recover on box 4. No. box 2 and box 4.
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Winks
Junior Member
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April 2016
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Tax & buying art, by Winks on May 28, 2017 22:46:55 GMT 1, Lol. Yes, box 2 and box 4 and then box 1 when you have to charge VAT on the sale. And if it's not for resale then you can't recover in box 4 as it's for a private purpose.
Ok. But this conversation was about a art business company with the intention to sell.
Lol. Yes, box 2 and box 4 and then box 1 when you have to charge VAT on the sale. And if it's not for resale then you can't recover in box 4 as it's for a private purpose. Ok. But this conversation was about a art business company with the intention to sell.
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Winks
Junior Member
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April 2016
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Tax & buying art, by Winks on May 29, 2017 0:06:32 GMT 1, ....with the intention to sell but not actually sold. Stock. Therefore no adjustment to box one.
....with the intention to sell but not actually sold. Stock. Therefore no adjustment to box one.
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Winks
Junior Member
Posts โข 2,774
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April 2016
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Tax & buying art, by Winks on May 29, 2017 7:38:22 GMT 1, ....with the intention to sell but not actually sold. Stock. Therefore no adjustment to box one. If it can evidence a genuine intention to sell then fine. But it sounds like the business won't be able to do that - it will require a business plan, a store, advertising to evidence a genuine intention etc. If it has that, it will be making sales and will be required to account for VAT on sales.. What's the reason for purchasing from another member state, anyway? Purchasing ยฃ10k of stock domestically in the UK: Pay 2k Output tax on purchase Recover 2k Input tax as cost =Net 0 Purchasing ยฃ10k of stock from Germany: Pay ยฃ0 German VAT on purchase Account for ยฃ2k acquisition tax on purchase Recover 2k input tax as cost =Net 0 The requirement to account for acquisition VAT (equal to UK VAT rate) is there to stop UK businesses shopping for goods in member states with lower VAT rates.
It's a good point and I suppose that art bought as an investment by a uk company can claim vat inputs and not have to have an intention to sell.
....with the intention to sell but not actually sold. Stock. Therefore no adjustment to box one. If it can evidence a genuine intention to sell then fine. But it sounds like the business won't be able to do that - it will require a business plan, a store, advertising to evidence a genuine intention etc. If it has that, it will be making sales and will be required to account for VAT on sales.. What's the reason for purchasing from another member state, anyway? Purchasing ยฃ10k of stock domestically in the UK: Pay 2k Output tax on purchase Recover 2k Input tax as cost =Net 0 Purchasing ยฃ10k of stock from Germany: Pay ยฃ0 German VAT on purchase Account for ยฃ2k acquisition tax on purchase Recover 2k input tax as cost =Net 0 The requirement to account for acquisition VAT (equal to UK VAT rate) is there to stop UK businesses shopping for goods in member states with lower VAT rates. It's a good point and I suppose that art bought as an investment by a uk company can claim vat inputs and not have to have an intention to sell.
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Deleted
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January 1970
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Tax & buying art, by Deleted on May 29, 2017 13:01:47 GMT 1, I don't know what business the OP is in but I think one way would be to buy something relevant to the business for a lot of money. A machine or a van etc against tax. Then re sell the machine or van etcand with that money buy the art.
I don't know what business the OP is in but I think one way would be to buy something relevant to the business for a lot of money. A machine or a van etc against tax. Then re sell the machine or van etcand with that money buy the art.
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londonfx
Junior Member
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December 2013
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Tax & buying art, by londonfx on May 29, 2017 14:15:45 GMT 1, I'm not an expert my any means. But i have spoken to my accountant about this in the past. I have a limited company. And they have said that you can get away with the odd bit of artwork, to brighten up your office. If you can justify it as advertising that would be even better.
But they said it's best to keep it cheap. As to not alert the tax man.
As far buying it, using it as an asset and selling for profit later in life. I just don't see it being possible. For a start you'll have to declare the cost price and VAT. And then when you sell it, you'll have to declare the sale price and VAT again. And pass tax on the profit. If it were possible at all.
Even if you set yourself up as a gallery. You rhetorically could do the above. But you'll still need to declare everything and pay the tax on the profit. So it's surely not worth it??
Like I said, I'm not an expert at all. And I may have just regergitated some above posts.
I'm not an expert my any means. But i have spoken to my accountant about this in the past. I have a limited company. And they have said that you can get away with the odd bit of artwork, to brighten up your office. If you can justify it as advertising that would be even better.
But they said it's best to keep it cheap. As to not alert the tax man.
As far buying it, using it as an asset and selling for profit later in life. I just don't see it being possible. For a start you'll have to declare the cost price and VAT. And then when you sell it, you'll have to declare the sale price and VAT again. And pass tax on the profit. If it were possible at all.
Even if you set yourself up as a gallery. You rhetorically could do the above. But you'll still need to declare everything and pay the tax on the profit. So it's surely not worth it??
Like I said, I'm not an expert at all. And I may have just regergitated some above posts.
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