Sole Trader, hypothetical windup - VAT questions?

[WindingUp]

Hi all,

Hope you don't mind my asking, I've searched (Albiet briefly) and can't find an answer to my questions. I've been a sole trade for about 19 months, and just finding it nigh on impossible to get beyond eeking out a living each month. Holidays are a no-go, and if unforseen expenses come up, I find it hard to cope with them.

With that in mind, I'm considering winding up my business. I'm VAT registered despite never exceeding the cumpulsory threshold for registering for VAT - this was on the advice of the franchise owner I bought into so I could claim back VAT on equipment and training. I'm worried that if I de-register as a sole trader, that I'll be liable to pay back the taxes on my equipment. Could someone perhaps shed some light on this?

Ideally, I'd love just officially wind the business up, go get a PAYE job and pay off my business loan as normal.

 

[Paddy199]

Technically they can seek recovery of VAT where you seek to deregister but are continuing to trade.

However, they are unlikely to seek repayment where you are winding it up for genuine purposes.

 

[simplyjoe]

Unless you sell the equipment the Revenue will seek to treat the remaining equipment as a self supply at the market value of the equipment. If you sell the equipment you will also have to charge VAT on it. If you dont sell it the remaining value is deemed to include VAT. If say the equipment is worth €5,000 (gross) then you would have a VAT liability of €867 on cessation. You would then be free to sell this equipment subsequently. Obviously if you sold it for an inflated amount the Revenue may seek to recover further VAT.