Module 220 min2113 wordsFree — no account
The final accounts: assets left over, VAT on cessation and the last returns
The module’s worked examples, then cases to attempt before revealing their solution · 6 sections · 542 words · 6 min
Worked example
Clearance sale or private use
A clothing shop holds garments bought for €6,000 with VAT deducted. The owner sells part of them to a fellow trader for €2,000 plus VAT, so €440 of tax on the invoice. The rest, which would cost €1,500 to buy today, goes home with her: private use with VAT of €330. Both amounts go into the final settlement.
Worked example
Roberto's computer
Roberto, a photographer under the ordinary VAT regime, bought a computer three years ago for €2,400 plus VAT and deducted the tax. On closing he keeps it for personal use. An equivalent model would cost €900 plus VAT today. The base is €900, not €2,400: VAT due is 900 × 22 % = €198, which goes into the final settlement.
Worked example
Sofia, a flat-rate designer
Sofia registered straight into the flat-rate scheme in 2022 and in 2023 bought a professional tablet for €1,200 including VAT, without deducting it. She closes in September 2026 and keeps it: no VAT on private use, since the purchase carried no deduction. She files form AA9/12 within thirty days; the annual VAT return does not concern her.
Worked example
Roberto's final settlement
Roberto, under the ordinary regime with quarterly settlement, issues his last invoice in February 2026 for €1,800 plus VAT, so €396 of tax. He keeps the computer, with €198 of VAT on private use. He has no deductible purchases in the first quarter: VAT for the period is 396 + 198 = €594, before the surcharge that applies to quarterly filers.
Worked example
The gain on the van
A plumber closes his sole-trader business and keeps the van. His books show €4,000 of cost not yet depreciated; the normal value of an equivalent van is €7,000. The gain that goes into the final year's income is 7,000 − 4,000 = €3,000.
Practical case
Anna closes her ceramics shop
Anna, who runs a trading sole-trader business under the ordinary VAT regime, ceases all activities on 31 December 2026. She keeps the unsold stock, bought for €3,000 with VAT deducted; the same assortment would cost her €2,500 today. She also keeps the van, bought second-hand from a private seller with no VAT to deduct, with €4,000 of cost not yet depreciated and a normal value of €7,000. How much VAT is due on private use? What gain goes into income? By when must the deregistration filing arrive to avoid the 2027 annual fee?
Hint: For each asset, ask whether VAT was deducted on purchase, then use the article 13 base for VAT and the paragraph 3 difference of article 86 for the van. For the register, count thirty days from the cessation.
Show the solution
Stock: VAT was deducted on purchase, so private use is a taxable supply. The base is the purchase price at the time of the takeover, €2,500, not the €3,000 paid: VAT 2,500 × 22 % = €550, to be included in the last VAT return. Van: no deduction on purchase, so no VAT; for income the gain is 7,000 − 4,000 = €3,000. The cessation falls on 31 December 2026: the deregistration filing with form I2 must reach the register by 30 January 2027, with €17.50 of stamp duty.
Answer: €550 of VAT on the stock, no VAT on the van, a €3,000 gain, filing by 30 January 2027
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