Questions and Answers
I’m VAT registered and I have just bought a second-hand vehicle for the business. Is there any VAT I can reclaim on this purchase?
If the vehicle you have purchased is a car, it is extremely unlikely you will be able to reclaim VAT on it. This is because cars, whether purchased new or second-hand, are specifically excluded from the normal VAT reclaim procedure. The only exception is if the car is to be used exclusively for business. Being available for private use, even if not actually used for this, will fail this test. As a result, a car will usually need to be unsuitable for private use to qualify. This would include taxis and cars used for driving instruction.
Commercial vehicles, such as vans and trucks, can have VAT reclaimed on them in the same way as any other business purchase. Usually the distinction between a car and a commercial vehicle will be obvious. However, care should be taken when a vehicle exhibits some of the traits of both. Vehicles such as double-cab pickups, which have two sets of seats, can be defined as cars under these rules. If in doubt, seek professional advice before purchasing a vehicle.
In either case, you will still need a purchase invoice showing the VAT you are seeking to reclaim. If no VAT is shown on the purchase invoice you receive, then no VAT reclaim will be possible. There are two main reasons for a dealer not to show VAT on their invoices. A small dealer may have a turnover below the registration limit and hence not be registered at all. Alternatively, VAT registered second-hand vehicle dealers are able to operate a special VAT scheme called the Margin Scheme. If this is the case, the purchase invoice should state the sale is under that scheme and there is no VAT to be reclaimed.
I’ve lost track of time and failed to file my company confirmation statement when
it was due. What penalties am I facing?
The confirmation statement (formerly the annual return) is a yearly report to Companies House. This provides basic information about the company, such as the names of the officers, its registered office address, and details of who controls the company. By default, the date of the report itself is the anniversary of incorporation. Companies have 14 days from that date to file the confirmation statement.
The good news is that, unlike accounts, there are no financial penalties for filing your confirmation statement late. This does not mean that you should simply ignore this requirement. Companies House can bring criminal proceedings against company officers for failure to fulfil their duties. This can lead to personal fines being levied on those directors. Companies House can also move to strike the company from the register. If the company is struck off, all its assets become property of the Crown. Since a company’s filing history is visible to the public, a history of late filing could also affect its reputation with its trading partners.
It is possible to file a confirmation statement at a date other than the anniversary. This can be done either to update the public record earlier, or to change the date to a less busy time of year. Confirmation statements cannot be filed more than 12 months apart, so any such filing has to be at an earlier date.
We hope you have enjoyed reading this article. The future of our volunteer led, non-profit publication would be far more secure with the aid of a small donation. It only takes a minute and we would be very grateful.