Market leading insight for tax experts
View online issue

How to apply the Capital Goods Scheme

Speed read

The Capital Goods Scheme (CGS) is a complex set of rules which present a number of challenges not least because the values associated with capital items inevitably mean that any errors in the application of the rules can be costly, in terms of VAT and potential penalties. It is important to remember, however, that the scheme is designed to ensure that the recovery of VAT on capital items is fair and reflects the true business usage. This article sets out how the scheme works, issues surrounding the disposal of a capital item including the application of the ‘disposal test’, consequences of the cessation of taxable supplies as well as the scheme’s relevance to business transfers. The article also includes examples of how to make adjustments under the CGS.

If you or your firm subscribes to, please click the login box below:

If you do not subscribe but are a registered user, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this article in full.
Please reach out to customer services at +44 (0) 330 161 1234 or '' for further assistance.