Capital goods scheme
(SI 1995/2518 regs 112–116)
Input tax adjustment following change in taxable use of capital goods
| Item | Value | Adjustment period |
| Computer equipment | £50,000 or more | Five years |
| Ships, boats or other vessels1 | £50,000 or more | Five years |
| Aircraft1 | £50,000 or more | Five years |
| Land and buildings | £250,000 or more2 | Ten years (for adjustment periods commenced before 1 January 2011, five years where interest had less than ten years to run on acquisition) |
1 Applies for goods acquired on or after 1 January 2011.
2 Figure reduced to £1 where owner (‘O’) of item or a person to whom O has granted an interest in that item:
(b) decides, no later than 31 March 2013, to treat the item as a capital item; and
(c) makes a written record to that effect, specifying the date of the decision.
Adjustment formula where adjustment period begins before 1 January 2011
Adjustment formula where adjustment period begins on or after 1 January 2011
The adjustment percentage is the percentage change in the extent to which the item is used (or treated as used) in making taxable supplies between the first interval in the adjustment period & a subsequent interval. (The first interval generally ends on the last day of the tax year in which the input tax was incurred.) For goods acquired on or after 1.1.11 total VAT includes any non-business VAT & the extent to which a capital item is used for business purposes must be determined when ascertaining taxable use for each subsequent interval.