VAT Notice 706/2 provides guidance on the Capital Goods Scheme, a VAT mechanism that allows businesses to adjust their input tax recovery over an extended period when they purchase certain high-value capital items. The scheme covers specified assets and enables traders to reclaim VAT progressively based on actual business use, with rules governing how adjustments apply if goods are disposed of or their use changes during the recovery period.
Source: HMRC (GOV.UK) – Read the original