Accounting for stock taken out of business for personal use

[Leesalad]

I operate an online retail business in sports gear. For Income Tax and VAT return purposes, I would like to know how to account for stock that I take out of the business for my personal use or for gifts to family and friends.

 

[Scalloway]

You account for it at cost. Add VAT on the cost price to your sale VAT for your VAT return.

 

[David Griffiths]

To comply with the rules, you account for it at full selling price, not cost if the goods are taken from stock.

That's always been the case, backed up by case law, but the provision was actually put in the legislation in a fairly recent budget

 

[Scalloway]

I bow to your superior knowledge for Income Tax but VAT is accounted for at cost price according to this.

http://www.hmrc.gov.uk/manuals/bimmanual/bim31560.htm

 

[Leesalad]

Thanks for your helpful answers!

 

[David Griffiths]

I bow to your superior knowledge for Income Tax but VAT is accounted for at cost price according to this.

http://www.hmrc.gov.uk/manuals/bimmanual/bim31560.htm

I'll bow to your superior knowledge for VAT! That link (none too clearly) confirms the position for Income Tax, as it refers to "a credit for Case I of the £150 retail" Case I is the old name for trading profits.

I'd also make the point that the need to account for retail price only applies to something that is taken from stock - if you order in something for personal use you can simply charge the cost of the item to drawings.