VAT on Business Assets With Private Use

It is very commom for a smaller business to have assets which have been acquired which are used for both business and private use.

Traditionally, this could be dealt with either by claiming only the percentage of the input VAT which corresponded to the percentage of business use or by claiming all the input VAT and then making a VAT charge (i.e. adding to the output VAT payable) for the private use on an ‘as you go’ basis. This latter method is called ‘Lennartz accounting’, after the VAT case that established the principle.

Following a Dutch VAT case, however, the use of Lennartz accounting has been considerably restricted and, in 2010, HMRC issued revised guidance on the correct  VAT treatment in such cases.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.
Print pagePrintable Version

Ask a free legal question

Complete this simple form if you
would like to ask us a
free legal question
 

What Our Clients Say

We would like to thank you for the superb work and attention to detail that has gone into our dispute with the council so far! 

Our Architect put together a very professional document which was further enhanced and polished by your very professional input. 

You are in fact unique in my personal experience of the legal profession in that you take your duty of care very seriously. It is obvious that the outcome concerns you greatly and your determination to win is much appreciated!

Thank you from us both. 

Best Regards
 
Mr and Mrs X, Surrey