Andrew Needham looks at how a business can use the capital goods scheme to adjust the VAT claimed on an asset.
The capital goods scheme (CGS) is a method of adjusting VAT recovery in line with taxable use and can be used by businesses to increase VAT recovery, but it can also result in the repayment of some VAT.
What’s covered by the capital goods scheme?
The CGS is designed to adjust the input tax recovered by partially exempt businesses and businesses that have both business and non-business income on specified assets above a certain level over either a five or ten year adjustment period, depending on the type of asset, in order to reflect changes in the taxable use of that asset. The adjustment calculations have to be carried out annually on
