Spring 2008 Newsletter Content Winter Of Discontent CGT Winners CGT Losers Shifty Business Anything To Declare? Long Arm Of The Law Irreplaceable You Earn As You Pay Ask Questions Later Capital Ideas ISA ISA ISA Referee! Go Green VAT Or No VAT? Taking The Register Close Encounters May Contain Nuts Going Concern Ancient History Business And Pleasure Do Your Duty Know Your Rights Time To Go? Passing The Buck

Business And Pleasure If you buy something to use in your business, you can claim back the VAT on the cost of it. If you are going to use it partly for non-business purposes, you have a choice - you can claim back a fair proportion of the VAT representing the likely business use; or you can claim back all the VAT up front, then pay a little back every quarter as if you were renting the asset to yourself. The quarterly charge effectively gives you an interest-free loan from HMRC. If you buy something on which the VAT is £10,000 and there is 90% private use, you can either claim £1,000 and forget about it - or claim £10,000, and pay £9,000 to HMRC in £450 instalments over 5 years. HMRC have always preferred traders to make the partial claim - they have even tried to outlaw the other approach, but the European Court has ruled that traders are entitled to do it as long as there is some genuine business use of the expenditure. From 1 November 2007, HMRC have for the first time introduced formal rules on how you calculate the private use charges, spreading the cost of the item over 10 years for buildings and 5 years for anything else. If you have any expenditure which has mixed business and private use, we will be happy to advise you on the best VAT treatment.