UK Simplifying Capital Goods Scheme for VAT

UK HMRC has published a policy paper on the Simplification of the Capital Goods Scheme. The Capital Goods Scheme (CGS) requires an annual review of the use of certain assets in making taxable supplies for VAT purposes. When taxable assets are used in making taxable supplies, a business may reclaim the VAT incurred on the acquisition of the assets based on the percentage of use. Where that percentage of use subsequently increases or decreases, an adjustment in the VAT reclaim is required. Sim…