Andrew Needham looks at what happens if you use a business asset for non-business purposes.
When a business buys an asset and puts it to a taxable business use, it can recover the VAT on the purchase of it. However, in some cases, the asset is purchased with the intention of using it for both a business and private use or if after a period of use in the business it is decided to put it to private use.
But what is the VAT position when this happens?
Both business and private use
Businesses can generally only reclaim VAT on the proportion of the assets used for business purposes.
Example 1: How much VAT?
If a business buys a computer and uses it 50% for business and 50% for private use, it can only reclaim 50% of the VAT. Normally, it would simply reclaim that proportion of VAT on its
