Ceasing trading

[aimsir_te]

I am a sole trader since 2017 and was vat registered from the get-go even though I was below the threshold. My average turnover from year two has been about 80,000k.
i am considering closing the business and am wondering about vat implications. As a primary food producer I have not charged vat on my products but i have been able to claim vat on my purchases throughout the last 5 years. Will i be required to refund the vat claimed during this time?
i have some assets i intend to sell if i closedown, ammounting to about 20,000k in value.
thanks

 

[cremeegg]

You should not have to repay VAT on goods purchased for resale given that they are in fact sold. If at the end of trading they cannot be sold I would view them like spoilage. They were bought with the intention to resell there should be no issue of repaying the VAT.

The issue of machinery may be more complicated. If you sold the machinery id advance of ceasing to trade and charged VAT on the sale, I believe that would be a correct treatment.

While professional advice might be needed, it might cost more that the potential VAT involved.

You might get more detailed advice on here, but you have provided very sparse details.

 

[Ciru75]

I am a sole trader since 2017 and was vat registered from the get-go even though I was below the threshold. My average turnover from year two has been about 80,000k.
i am considering closing the business and am wondering about vat implications. As a primary food producer I have not charged vat on my products but i have been able to claim vat on my purchases throughout the last 5 years. Will i be required to refund the vat claimed during this time?
i have some assets i intend to sell if i closedown, ammounting to about 20,000k in value.
thanks

There are provisions requiring you to repay net VAT refunded over the last three years of trading if you were not required to register for VAT but elected to register. From what you've said, you would been required to register in 2018 so I don't think that would apply.

 

[aimsir_te]

You should not have to repay VAT on goods purchased for resale given that they are in fact sold. If at the end of trading they cannot be sold I would view them like spoilage. They were bought with the intention to resell there should be no issue of repaying the VAT.

The issue of machinery may be more complicated. If you sold the machinery id advance of ceasing to trade and charged VAT on the sale, I believe that would be a correct treatment.

While professional advice might be needed, it might cost more that the potential VAT involved.

You might get more detailed advice on here, but you have provided very sparse details.

Thanks for your reply. I didn’t intend to be vague with my initial message.
the items i bought would fall into the capital assets and consumables category and nothing bought was intended for resale (as my product does not incur vat). I have not sold on any assets but would intend to do once the business wraps up

 

[jpd]

I think you will have to sell the assets before the business is wound up, no?