We are a small Film Production company buying equipment for our own productions and that of other clients.
According to the Flat Rate rules we can claim on assets above 2K.
We have been doing this for a number of years. We also pay 13% on our turnover in the category of film production.
The problem is I've found a note saying you can't claim for capital expenses that you intend to hire out.
This causes me a lot of issues as we both use our equipment and rent it to clients.
It doesn't make any sense because if we'd chose not to rent it out the HMRC would have much less revenue whilst at the same time according to their notes legitimising the VAT reclaim!
We are having a VAT compliancy check and this has got me concerned.
Any thoughts would be appreciated.